Second Circuit Reinstates TCPA Case

In Lary v. Rexall Sundown, Inc. (decided on April 10, 2017), the Second Circuit Court of Appeals continued to look down on attempts to moot a class action by “picking off” the lead plaintiff.  Picking off is a strategy in which a defendant tries to end a class-action lawsuit by paying the plaintiff everything he or she demanded on their individual claim, thus leaving the class without a representative.

Lary is a case brought under the Telephone Consumer Protection Act (TCPA). The defendant tried to pick off the plaintiff by serving an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure and then quickly moving to dismiss the case on mootness grounds. In 2015, the district court found it procedurally significant that the plaintiff had not yet moved for class certification and granted the motion to dismiss.

More than two years later, the Second Circuit reversed the district court ruling, stating, “the District Court's dismissal was based on an error of law since Lary's claim was not mooted by [the] offer of judgment. Accordingly, judgment should not have been entered in his favor.”  The case now goes back to the district court, where Lary will presumably re-file his motion for class certification.

The ruling continued the line of authority set forth by the United States Supreme Court in Campbell-Ewald Company v. Gomez (decided on January 20, 2016, after the New York district court ruled on the Lary action), which held that a class-action lawsuit cannot be eliminated by making an offer of full relief to the lead plaintiff. 

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