The Circuits are split as to what effect an offer of judgment directed to a named plaintiff has on a putative class action.  The Seventh Circuit has taken a rigid view, holding that an unaccepted offer of judgment affording full relief to the named plaintiff renders a putative class action moot — unless there is already a motion for class certification on the docket.  The Second Circuit has yet to adopt or reject the rule, and, in an uncertain legal landscape, plaintiffs in putative class actions are strategizing to avoid the consequences of the Seventh Circuit holding.

Physicians Healthsource, Inc., v. Purdue Pharma L.P., et al, No. 3:12-cv-1208 (D. Conn. Sept. 6, 2013).


Plaintiff Physicians Healthsource, Inc. filed a putative class action alleging violations of the Telephone Consumer Protection Act based on Purdue Pharma and its affiliates sending marketing materials by fax which did not contain the required opt-out notices.  Defendants moved to dismiss the litigation, but their motion was granted only in part, and the suit proceeded.

After failing to knock out the litigation through a motion to dismiss, any defendant would surely anticipate a motion seeking certification of the class in due course.  But Physicians Healthsource made a surprising move:  it filed a motion to certify the class before discovery had even begun.  (Slip Op. at 2.)

The District Court Opinion

In ruling on the motion for class certification, Judge Underhill began with a familiar recitation of black letter law.  To decide whether class certification is appropriate, the court must determine whether Rule 23(a)’s requirements of numerosity, commonality, typicality and adequacy are met, and plaintiff bears the burden of establishing the prerequisites by a preponderance of the evidence.  Slip Op. at 2-3.

The Court then explained that it could not fulfill its duty to rigorously analyze the requirements of Rule 23(a) because plaintiff filed its motion prior to discovery.  The Court noted that plaintiff conceded that more discovery was needed, but sought “leave to submit a memorandum of law … after it obtains discovery.”  Slip Op. 2 (emphasis in original).

Judge Underhill surmised that plaintiff was spooked into action by the recent Seventh Circuit decision holding that an unaccepted offer of judgment affording the named plaintiff full relief will render moot a putative class action unless there is a class certification motion on the docket.  See id. (citing Damasco v. Clearwire Corp., 662 F.3d 891, 896 (7th Cir. 2011)).  The Court noted that the Second Circuit has not adopted the rule, and other circuits have expressly rejected it.  Id.

The Court denied the motion, dismissing it as premature.  It noted, however, that even if a premature motion for certification will preserve plaintiff’s ability to pursue a putative class action in the face of an offer of judgment, there is no reason for the Court to allow an “under-developed motion” to “linger on the docket.”  Judge Underhill explained that orders granting or denying certification are “inherently tentative,” and the Court is free to modify such an order according to developments in the litigation.  The Court therefore denied Plaintiff’s motion for class certification without prejudice to renewal at a later date.


The Physicians Healthsource decision does not resolve whether the Second Circuit will follow the Seventh Circuit in adopting a rule that an unaccepted offer of judgment affording full relief to the named plaintiff will render a putative class action moot unless there is a motion for class certification on the docket.

Until the issue is expressly resolved by the Second Circuit, the Physicians Healthsource decision will encourage named plaintiffs to file for class certification at the earliest possible date, well before discovery allows development of a meaningful record.  If courts follow Judge Underhill’s example, there is no harm to plaintiff in filing a premature motion, and doing so will preserve their ability to ward off the consequences of the Seventh Circuit rule while also allowing them to later re-file for class certification on a full record.