9th circuit follows Justice Kagan’s dissent in Genesis HealthCare

by Brian Wolfman

Last April, the Supreme Court decided Genesis HealthCare v. Symczyk, which held that an opt-in collective action brought under the Fair Labor
Standard Act was moot on the assumption that
an unaccepted offer from the defendant to the lead plaintiff of "complete
relief" mooted the lead plaintiff's individual claim. (The
Court made this assumption because, the Court said, the plaintiff
conceded the point below and did not contest it until its Supreme Court
merits brief.) With that assumption in place, the Court held that the collective action on behalf of others similarly-situated was also moot.

Justice Kagan's four-justice dissent in Genesis maintained that the assumption that an unaccepted offer would moot the lead plaintiff's claim was dead wrong. If Justice Kagan's view is correct — and a lead plaintiff's claim remains alive in that circumstance — the Genesis
decision may have little practical effect (as her dissent argued). That's true because if the lead plaintiff's claim is not moot, then the
opt-in representative action (and, presumably, a traditional opt-out class action as well) will remain alive.

On October 4, the Ninth Circuit agreed with Justice Kagan's dissent. In
Diaz v. First American Home Buyers Protection Corp., the court held that the defendant's unaccepted offer to the plaintiff of complete relief under Federal Rule of Civil Procedure 68 — that is, an offer of everything that the plaintiff could possibly recover — did not moot the plaintiff's individual case.

Under that holding, an offer to a representative plaintiff, if unaccepted, cannot be used to kill off a class or representative action. The Ninth Circuit's holding in Diaz deepens an existing circuit split. So, the issue may be headed back to the Supreme Court.

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