Page 19 - Ohio Vol 5 No 2
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JONATHAN STENDER | Class Action
Rule 67 Not a Mechanism for Picking Off Named Plaintiffs in a Rule 23 Class Action
Class action defendants try to evade class-wide liability using Rule 67, which gov-
erns deposits into court. Defen- dants’ argue that, under Rule 67, they can pick off named plaintiffs in class action matters by simply depositing with the court funds equal to tthe value of the named
plaintiff’s claim.
Federal courts have rejected these attempts to use Rule 67 as a means of picking o  named plainti s.
First, a Rule 67 deposit is not a ten- der of complete relief.  e funds are under the court’s control, and defen- dant can still claim an interest in the funds. Plainti  cannot simply with- draw the funds like a bank account.
Second, Rule 67 does not change the rule that plainti s are entitled to their day in court. No doctrine com- pels a plainti  to accept a settlement o er, whether the claim is an individ- ual claim or a class claim.
 ird, allowing defendants to evade class liability by picking o  named plainti s would preclude any defen- dant from ever being subject to class- wide liability, thereby eviscerating Rule 23. Rule 23’s dra ers could not have intended it to apply only at de- fendant’s discretion.
RULE 67 IS NOT A SETTLEMENT MECHANISM
In cases where a money judgment is sought, Rule 67 allows a party, by leave of court, to deposit money in court. Rule 67(a). “ e purpose of the deposit is to relieve the depositor of responsibility for a fund in dispute.” 12 Wright & Miller, Fed. Prac. & Proc. § 2991 (3d ed. 2018). A party may not invoke Rule 67 “to create a fund to secure payment of a prospective judgment.” Arcelormittal Cleveland
Inc. v. Jewell Coke Co., 1:10-CV- 00362, 2010 WL 5158869, *2 (N.D. Ohio 2010). And “ nancial hostage taking is not the intended purpose of Rule 67.” Id.  erefore, a court prop- erly refuses to allow defendants Rule 67 deposit when its purpose is not to relieve defendant of responsibility for funds subject to competing claims, but to “procure a settlement of [p] lainti  ’s individual claims” despite an earlier rejection of a settlement o er. Jarzyna v. Home Properties, 201 F. Supp.3d 650, 656 (E.D. Pa. 2016).
A Rule 67 Deposit Is Not a Transfer of Funds to the Plainti 
A Rule 67 deposit does not operate as an account payable to plainti . Ful- ton Dental v. Bisco, Inc., 860 F.3d 541, 545 (7th Cir.2017). Because court per- mission is required to withdraw funds from the court’s registry, the registry “is nothing like a bank account in the plainti ’s name—that is, an account in which the plainti  has a right at any time to withdraw funds.” Id.
A PLAINTIFF HAS NO OBLIGATION TO ACCEPT A SETTLEMENT OFFER
 e assumption underlying defen- dants’ pick o  e orts through Rule 67 deposits is that plainti  must accept a tender of complete relief.  e Sev- enth Circuit has explained there is no doctrine that “a plainti ’s stubborn refusal to accept a generous settle- ment o er should be taken as the le- gal equivalent of acceptance.” Conrad v. Boiron, Inc., 869 F.3d 536, 541 (7th Cir.2017). Instead, plainti s are enti- tled to their day in court, even if pur- suing that day in court is not econom- ically rational. Id. If a plainti  abuses the litigation process, tools such as Rule 11 and 28 U.S.C. § 1927, and 28 U.S.C. § 1332(d) exist to address that abuse. Id. at 542. But those “tools do
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not include deemed acceptance of a proposed o er of settlement.” (Em- phasis sic.) Id.
Courts Repeatedly Refuse to Permit Defendants to Pick O  Named Plain- ti s
Courts have rejected e orts by de- fendants to moot class action claims by picking o  named plainti s, be- cause if defendants could moot class action claims at will, Rule 23 would be eviscerated.  e Ninth Circuit noted that allowing defendants to pick o  named plainti s “would e ectively ensure that claims that are too eco- nomically insigni cant to be brought on their own would never have their day in court.” Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091 (9th Cir.2011). Similarly, the Sixth Circuit observed that “allowing an unaccept- ed o er to moot a case would place defendants ... ‘in the driver’s seat,’ en- abling them to avoid signi cant class- based liability.” Wilson v. Gordon, 822 F.3d 934, 950 (6th Cir.2016) (quoting Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663, 672 (2016)).
 is concern with defendants gut- ting Rule 23 by picking o  named plainti s was articulated by the Su- preme Court almost 40 years ago: “[r] equiring multiple plainti s to bring separate actions, which e ectively could be ‘picked o ’ by a defendant’s tender of judgment before an a r- mative ruling on class certi cation could be obtained, obviously would frustrate the objectives of class ac- tions; moreover it would invite waste of judicial resourc-
es by stimulating successive suits[.]” Deposit Guaranty National Bank v. Roper, 100 S.Ct. 1166, 1174 (1980).
A U.S. Navy veteran, Jonathan Stender represents individuals and management in a wide spectrum of employ- ment and workers’ compensation matters. He has been recognized as a Super Lawyers Rising Star and is a strong proponent of ADR. In 2014, he was selected to join the Mediation and Arbitration Panel of National Arbitration and Mediation, a highly respected service.
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