To Moot or Not to Moot

iStock_000019098577Small-CharlieThe Second Circuit Court of Appeals has released its much-anticipated decision in Tanasi v. New Alliance Bank.[i]

The decision addresses whether the United States District Court[ii] properly denied the defendants’ motion to dismiss on the ground that plaintiff’s putative class action claims remained justiciable, even though the plaintiff’s claims were rendered moot by an unaccepted Offer of Judgment for complete relief made pursuant to Rule 68 of the Federal Rules of Civil Procedure (“Rule 68”).[iii]


Rule 68 is a cost-shifting rule designed to encourage settlements without the burdens of additional and unnecessary protracted litigation. Under Article III of the U.S. Constitution, “[w]hen a case becomes moot, the federal courts lack subject matter jurisdiction over the action.”[iv] Under Rule 68 of the Federal Rules of Civil Procedure, a defendant can settle a case by offering complete relief of the plaintiff’s claims until up to two weeks before trial.

In the Tanasi v. New Alliance Bank case, Plaintiff filed a putative nationwide class action against the defendants, First Niagara Financial Group, Inc. and its predecessor in interest New Alliance Bank, seeking money damages arising from the purportedly improper assessment of overdraft fees on his account and the accounts of others similarly situated. Nine days later, the defendants made a Rule 68 offer of judgment to Plaintiff “on his individual claims” for $10,000 plus interest, reasonable attorneys’ fees, costs, and any “other damages he seeks on his individual claims.”

Subsequently, defendants filed a motion to dismiss, arguing that their pre-certification Rule 68 offer of judgment to the named plaintiff in this case rendered the case moot. The District Court found that the putative class remained viable, and issued a decision denying Defendants’ motion to dismiss.

On Appeal, the Second Circuit affirmed the District Court’s decision that it maintained Article III subject matter jurisdiction on the ground that Plaintiff’s individual claims were not moot at the time the District Court denied defendant’s motion to dismiss.[v]

What It Means

Generally, this means that where a district court does not enter judgment against a defendant for an unaccepted Rule 68 Offer of Judgment for full individual relief, the claims of the plaintiff are not automatically mooted by the unaccepted Rule 68 offer.

However, the Second Circuit expressly declined to rule on the certified question as to whether the plaintiff’s putative class action claims, brought pursuant to Rule 23 of the Federal Rules of Civil Procedure, provided an independent basis for Article III justiciability. Notably, the Second Circuit expressly acknowledged a split in the Circuits, stating:

“The federal courts of appeals are split on this question. The Third, Fourth, Fifth, Seventh, Tenth, and Federal Circuits have all concluded that a Rule 68 offer of complete relief to an individual renders his case moot for purposes of Article III, regardless of whether judgment is entered against the defendant. On the other hand, the Ninth and Eleventh Circuits, the two courts of appeals that have considered this question most recently, have reached the opposite conclusion.”

Thus, this decision leaves open the question of whether putative class action claims under Rule 23 generally provide an independent basis for justiciability after a plaintiff’s individual claims are rendered moot. 


Despite the Second Circuit’s instant holding, there is some reason for optimism. In the case of Lary v. Rexall Sundown, Inc.,[vi] a Federal District Court dismissed a putative class action commenced pursuant to the Telephone Consumer Protection Act (“TCPA”), finding that an individual offer of judgment under Rule 68 in the sum of $3,500.00 mooted the case under Article III of the U.S. Constitution. To provide context for this determination, the District Court looked to the procedural history of Rule 68, stating that:

“… in 1984, the Advisory Committee on the Rules of Practice and Procedure of the Judicial Conference of the United States proposed a revision to Rule 68 that ‘expressly precluded offers of judgment in class or derivative actions,’ which was rejected by Congress….Thus, although district courts in this circuit have held that Rule 68 does not apply to class actions, Rule 68 is actually designed to insulate defendants willing to consent to judgment against incurring the costs of further litigation, and there appears no indication that protection should be denied defendants in class actions.”[vii]

Plaintiff Lary is appealing the decision, and as it stands, this matter is currently pending before the Second Circuit Court of Appeals.[viii] To that end, while the Tanasi court carefully avoided ruling on whether putative class action claims under Rule 23 generally provide an independent basis for justiciability after a plaintiff’s individual claims are rendered moot, time will tell where the Second Circuit and possibly the Supreme Court stand on this issue.

What’s more, applying the holding enunciated by the U.S. Supreme Court in Genesis Healthcare Corp. v. Symczyk,[ix], it’s still unclear whether the “fundamental differences” between Rule 23 class actions and collective actions as noted in the Court’s decision relate exclusively to the certification process and not the pre-certification context.

Therefore, notwithstanding the Second Circuit’s ruling in Tanasi, it’s still an open question of law as to whether putative class action claims under Rule 23 provide an independent basis for justiciability after a plaintiff’s individual claims are rendered moot.

The information and materials in this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances.  No attorney-client relationship is formed, nor should any such relationship be implied. Nothing in this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

Scott E. Wortman, Partner Warshaw Burstein, LLP

555 Fifth Avenue, New York, NY 10017,  attorney profile


Direct Telephone:  212-984-7723 , Cell phone: 646-709-6408, Facsimile: 212-972-9150


[i] 2015 U.S. App. LEXIS 7932 (2d Cir. N.Y. May 14, 2015)

[ii] Tanasi v. New Alliance Bank, 2013 U.S. Dist. LEXIS 177035 (W.D.N.Y. Dec. 17, 2013)

[iii] Federal Rule of Civil Procedure 68(a) provides that at least fourteen (14) days before trial, a “party defending against a claim may serve on the opposing party an offer to allow judgment on specified terms, with costs then accrued. If, within fourteen (14) days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance . . . . The clerk must then enter judgment.” Although, [a]n unaccepted offer is considered withdrawn . . . [i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay costs incurred after the offer was made.” Fed. R. Civ. P. 68(b) and (d).

[iv] Fox v. Bd. of Trs. of State Univ. of N.Y., 42 F.3d 135, 140 (2d Cir. 1994).” Doyle v. Midland Credit Mgmt., 2013 U.S. App. LEXIS 13291 at *5, 722 F.3d 78 (2d Cir. 2013).

[v] “…because the district court had not yet entered judgment against the defendants when it reached its decision on the motion to dismiss, the court maintained Article III subject matter jurisdiction over the case regardless of Tansi’s putative class action claims.” Tanasi, 2015 U.S. App. LEXIS 7932 *12 (2d Cir. N.Y. May 14, 2015)

[vi] 2015 U.S. Dist. LEXIS 16733 (E.D.N.Y. Feb. 10, 2015)

[vii] Id. at 37 – 38.

[viii] Court of Appeals Docket #: 15-601

[ix] 133 S. Ct. 1523, 185 L. Ed. 2d 636 (U.S. 2013).