The difference between an individual and class-action lawsuit can be significant for a business. What few business owners realize, however, is that every case begins as an individual case and only later does a court decide whether or not to certify the case as a class action. The question that class action defense attorneys have long considered is whether it possible to pay the named plaintiff’s individual claim and resolve the entire case before the issue of class certification is even considered. This tactic, known as a “pick off,” has been attempted for decades. Although a number of states have rejected the effectiveness of this tactic, Illinois has long been an outlier. Recently, the Illinois Supreme Court revisited its previous pick-off jurisprudence to clarify that a defendant can successfully pick off a named plaintiff in Illinois by “tendering” full relief before a motion for class certification has been filed.
According to the Illinois Supreme Court, tendering full relief entails paying the full amount demanded into the court’s registry, agreeing to pay the plaintiff’s reasonable attorney’s fees and costs, and effectively admitting liability. If there is injunctive or other non-monetary relief sought, the defendant may have to agree to that relief unconditionally as well.
In Joiner v. SVM Management, LLC, the dispute concerned unpaid interest on a security deposit under Illinois law. The plaintiffs rented an apartment from the defendant SVM Management, LLC. After the plaintiffs moved out, the defendant returned their security deposit but failed to pay interest on that deposit, as required by the Illinois Security Deposit Interest Act. The plaintiffs filed a complaint containing two class-action claims and an individual claim. The plaintiffs, however, did not file a motion for class certification with their complaint. Shortly after the complaint was filed, the defendant responded by tendering plaintiffs’ requested damages and attorney’s fees on the individual count and later filing a motion to dismiss.
After the plaintiffs refused the tender, the defendant argued that its tender made the claim moot pursuant to the Illinois Supreme Court’s previous decisions in Barber v. American Airlines, Inc., 241 Ill. 2d 450 (2011), and Ballard RN Center, Inc. v. Kohll’s Pharmacy & Homecare, Inc., 2015 IL 118644. The plaintiffs argued that the U.S. Supreme Court’s 2016 decision in Campbell-Ewald Co. v. Gomez overruled Barber and Ballard. We previously wrote about Gomez here.
The Illinois Supreme Court agreed to revisit its prior decisions on the issue in light of Gomez. In Barber and Ballard, the Illinois Supreme Court held that a tender of full relief prior to a motion for class certification being filed would moot a putative class action. In Gomez, the U.S. Supreme Court considered whether an unaccepted Rule 68 offer of judgment rendered a class action moot and held that it did not because an unaccepted offer was a nullity under basic principles of contract law.
The Illinois Supreme Court considered whether Gomez had an impact on its earlier decisions and found that it did not. The Court distinguished Gomez on the grounds that a tender is different than an offer in that it actually requires paying the money. The Illinois Code of Civil Procedure, the Court noted, expressly provides for such a tender, which admits liability and is unconditional. The court explained:
When a defendant tenders the relief sought by a named plaintiff prior to a motion for class certification, it does not force the plaintiff to accept a settlement against her will, as plaintiffs argue, but admits liability and satisfies plaintiff’s demand. A live controversy therefore no longer exists, and the court must dismiss the case if no other plaintiff steps into the named plaintiff’s shoes to represent the class.
In Joiner, the defendant’s attorney tendered the full amount sought by the plaintiff by sending a cashier’s check to the plaintiff’s attorney. The Court accepted that this tender mooted the claim but went on to explain that future tenders should be made by paying the funds to the court:
We hold that future tenders made to satisfy a demand if made after filing of suit, should be made to the court. If the tender fully satisfies the plaintiffs’ demand absent costs and attorney fees, the court could then hold a hearing on costs and, if applicable, attorney fees before dismissing the case contingent upon payment of costs and fees.
The Court’s full opinion is available here.
Lubin Austermuehle’s Chicago class action defense attorneys have successfully defended clients against putative class action lawsuits by picking off the named plaintiffs. Our consumer fraud and class action defense lawyers assist businesses accused of fraud defend lawsuits or actions or the target of investigation by the Illinois Attorney General or the FTC. Our Chicago business lawyers have more than thirty-five years of experience helping business clients on unraveling complex class action, business fraud and breach of fiduciary duty cases. Our Chicago class-action litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Elmhurst and Wilmette, near Waukegan, and Oak Brook, we serve clients throughout Chicago and the greater Chicagoland area.
If you’re facing a business or class-action lawsuit, or the possibility of one, and you’d like to discuss how the experienced Illinois class action defense attorneys at Lubin Austermuehle can help defend your business, we would like to hear from you. To set up a consultation with one of our Naperville and Chicago business law attorneys and class action and consumer trial lawyers, please call us at 630 333-0333 or contact us online.