We successfully short-circuited a putative class action in a claim brought under the Fair Credit Reporting Act (FCRA).
We successfully short-circuited a putative class action in a claim brought under the Fair Credit Reporting Act (FCRA). Plaintiff alleged willful violations of FCRA due to inclusion of plaintiff's sealed criminal history records in a background screening report prepared by our client for the plaintiff's prospective employer. Plaintiff also sought to represent a class of similarly affected individuals. The putative class, if certified, could have exposed our client to potential liability approaching $10 million. Prior to completion of class certification discovery, we made a Rule 68 Offer of Judgment to plaintiff in the amount of $25,000. The offer was based on the statutory maximum of $1,000 under the FCRA, plus punitive damages. The plaintiff moved to strike the Offer of Judgment in light of case law in the Third, Fifth, Seventh and Eight Circuits holding that an offer of judgment in this context would defeat the purpose of class actions by allowing defendants to "pick-off" each class representative. In response, we argued that a plaintiff could then effectively eliminate all Rule 68 Offers of Judgment by simply pasting the label of "Class Action" to a complaint. We also pointed out that the Sixth Circuit (which encompasses the Western District of Tennessee) had not directly ruled on this issue and the law in this regard was unsettled. In its 13-page opinion denying plaintiff's motion to strike, the court agreed with our interpretation of the law and quoted our brief in holding that the law in the Sixth Circuit was "unsettled indeed." Not only did the court deny the motion to strike, it also entered judgment for plaintiff in the amount of the offered $25,000 and dismissed plaintiff's claims as moot. The precedential value of this opinion so concerned the class action bar that it brought in national class action counsel in an attempt to overturn the court's decision via reconsideratiWon or appeal. We thereafter negotiated a settlement for a nominal amount, which included the court agreeing to vacate its opinion, solely for the purpose of effectuating settlement.