Zeigenfuse v. Apex Asset Management, L.L.C.

239 F.R.D. 400, 2006 U.S. Dist. LEXIS 90757, 2006 WL 3742773
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 14, 2006
DocketNo. Civ.A. 06-2789
StatusPublished
Cited by12 cases

This text of 239 F.R.D. 400 (Zeigenfuse v. Apex Asset Management, L.L.C.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zeigenfuse v. Apex Asset Management, L.L.C., 239 F.R.D. 400, 2006 U.S. Dist. LEXIS 90757, 2006 WL 3742773 (E.D. Pa. 2006).

Opinion

MEMORANDUM

BARTLE, District Judge.

Plaintiff Rebecca S. Zeigenfuse has filed this putative class action on behalf of herself and all others similarly situated against defendant Apex Asset Management, L.L.C. She asserts that defendant has violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. Plaintiff now moves to strike the offer of judgment which defendant has served upon her pursuant to Rule 68 of the Federal Rules of Civil Procedure.1

The maximum statutory damages for any one individual under the FDCPA is $U000. 15 U.S.C. § 1692k(a)(2)(A). On October 16, 2006, before the filing of a motion for class certification, defendant made Ms. Zeigenfuse, the named plaintiff, an offer of judgment of $1,001 plus reasonable costs and attorney’s fees. Generally, an offer of judgment providing plaintiff with the maximum allowable relief would moot plaintiffs claim if she were suing in her individual capacity. Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir.1991). She maintains, however, that such an offer is improper since she has filed a class action complaint.

Our Court of Appeals, in Weiss v. Regal Collections, 385 F.3d 337 (3d Cir.2004), grappled with the tension between Rule 68 and Rule 23 governing class actions. In that case, plaintiff Richard Weiss filed a class action complaint under the FDCPA, the same statute as is involved here. The defendant served an offer of judgment for his full monetary damage plus costs and attorney’s fees before he filed his motion for class certification. Plaintiff declined to accept the offer, and over his objections, the district court dismissed the complaint as moot. Plaintiff then appealed. The Court of Appeals reversed.

At the outset, the Court of Appeals recognized the salutary purpose of Rule 68 in individual actions. As the Supreme Court has explained, the “plain purpose of Rule 68 is to encourage settlement and avoid litigation ____ The Rule prompts both parties to a suit to evaluate the risks and costs of litigation and to balance them against the likelihood of success upon trial on the merits.” Marek v. Chesny, 473 U.S. 1, 5, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985). Once a defendant allows a plaintiff to take a judgment against it for all the relief to which he or she may be entitled, there is nothing further to try, and the action becomes moot. At that point, there is no reason for the action to continue.

The Weiss court, however, concluded the situation to be quite different when a class action complaint has been filed. If an offer of judgment to a putative class representative were allowed to stand, it would be an easy way for a defendant to thwart a class action which may be the only viable means of obtaining relief for class members who individually may have claims too small to sue on their own. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). A defendant, by an offer of judgment, could pay an insignificant amount to the named plaintiff to avoid a potentially significant payout if the lawsuit proceeded as a class action. Considerable wrongdoing could thus go unremedied. In addition, even if those similarly situated to the named plaintiff were not stymied by the lack of a class action, they often would have no option other than to bring small individual actions. These would not be in the interest of judicial economy and could likely generate excessive costs and fees compared to a class [402]*402action. For all these reasons, our Court of Appeals in Weiss held that Rule 68 cannot be employed to vitiate a putative class representative’s claim. It explained:

As sound as is Rule 68 when applied to individual plaintiffs, its application is strained when an offer of judgment is made to a class representative. As in Roper,2 allowing the defendants here to ‘pick off a representative plaintiff with an offer of judgment less than two months after the complaint is filed may undercut the viability of the class action procedures and frustrate the objectives of this procedural mechanism for aggregating small claims, like those brought under the FDCPA.

Weiss, 385 F.3d at 344.

The Weiss court made it clear that the defendant cannot circumvent Rule 23 by making a speedy offer of judgment either before class certification or before the filing of the motion for class certification.3 Weiss observed that such a defense maneuver is contrary to the thrust of Rule 23(e)(1)(A) which provides: “When a person sues or is sued as a representative of a class, the court must—at an early practicable time—determine by order whether to certify the action as a class action.” Rule 23 does not require the immediate filing of the motion. In this district, Local Civil Rule 23.1 allows a plaintiff 90 days after the filing of the complaint to file a motion for class certification “unless this period is extended on motion for good cause appearing.” The validity of a Rule 68 offer should not be determined by who wins the race to the courthouse—the filer of the motion for class certification or the filer of a Rule 68 offer. Absent undue delay in the filing of a motion for class certification, the motion will be deemed to relate back to the date of the filing of the complaint. Weiss, 385 F.3d at 346-48. Here, there has been no undue delay. After an early status conference and in an effort to have the case proceed in an orderly fashion, the court directed the plaintiff to file her motion for class certification on January 16, 2007, after the conclusion of class action discovery.

Defendant argues that Weiss is inapplicable because it does not seek to moot Ms. Zeigenfuse’s individual claim but simply to shift the risk of costs to her should she not be successful. Defendant is relying on that portion of Rule 68 which reads: “If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after making the offer.” The offer of judgment, served by first class mail on October 16, 2006, stated that it shall be deemed withdrawn if not accepted within ten days. On October 20, four days after mailing, plaintiff filed its motion to strike. The ten day period has expired, the offer has not been accepted, and defendant has not attempted to have the action dismissed. The offer of judgment, however, also contained the following: “If this Offer of Judgment is not accepted by plaintiff and the judgment finally obtained by plaintiff is not more favorable than this Offer, the plaintiff must pay her costs incurred after making this Offer, as well as the costs of defendant as allowed by the law of the circuit.” This portion of the offer remains in effect.

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Cite This Page — Counsel Stack

Bluebook (online)
239 F.R.D. 400, 2006 U.S. Dist. LEXIS 90757, 2006 WL 3742773, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zeigenfuse-v-apex-asset-management-llc-paed-2006.