KAYMARK v. UDREN LAW OFFICES, P.C.

Filing 111

MEMORANDUM ORDER denying Plaintiff's 105 Motion to Strike Defendant's Rule 68 Offer of Judgment. The Clerk of Court is directed to remove Plaintiff's motion, brief in support of the motion, and the attached exhibit of Defendant's Rule 68 Offer (ECF Nos. 105, 106, 106-1) from public view. Signed by Magistrate Judge Cynthia Reed Eddy on 3/10/2017. (bap)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

DALE A. KAYMARK, individually and
on behalf of other similarly situated
current and former homeowners in
Pennsylvania,
Plaintiffs,
v.
UDREN LAW OFFICES, P.C.,
Defendant.

)
)
)
)
)
)
)
)
)
)
)
)
)
)

Civil Action No. 13-419

United States District Judge
Cathy Bissoon
United States Magistrate Judge
Cynthia Reed Eddy

MEMORANDUM ORDER
Pending before the Court is Plaintiff’s motion to strike a Rule 68 offer of judgment made
by Defendant on February 17, 2017. (ECF Nos. 105, 106). The Rule 68 offer was made to both
Plaintiff and the putative class. Plaintiff filed this motion fourteen days after the offer was made,
which under Rule 68 is the final date that he could have accepted it. Fed.R.Civ.P. 68. Defendant
filed a brief in opposition to the motion on March 9, 2017. (ECF No. 110). For the reasons that
follow, Plaintiff’s motion will be denied.
In his motion, Plaintiff complains that Defendant inappropriately made this offer before
class certification, and that it is incompatible with Rule 23. The Court notes that these policy
concerns are legitimate, as explained in Wright & Miller:
There is much force to the contention that, as a matter of policy,
the rule should not be employed in class actions. Class actions can
only be settled with the approval of the court, and the judge is not
required to acquiesce in the desire of the class representative that
the case be settled. Thus, if Rule 68 is generally intended to
galvanize plaintiffs to settle cases or face adverse consequences if
they do not, it would not seem to work in class actions because
1

plaintiffs do not have unfettered power to do so. In addition, the
potential coercive impact of the rule on the class representative
could create a conflict of interest for him or her since possible
personal responsibility for defendant's costs for a full class action
may be far out of proportion to the class representative's stake in a
possible individual recovery. Even the court would then be
hamstrung in proceeding by the need to consider the propriety of
class treatment as well as the reasonableness of the settlement
proposal. … Concerns of this character have prompted reformers
to propose excluding class actions explicitly from the operation of
Rule 68.
12 Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 3001.1 (2d ed.) (footnotes
omitted).
Nevertheless, it is beyond this Court’s function to decide matters based solely on policy
concerns, and Plaintiff has failed to establish that the Court can strike Defendant’s Rule 68 offer
of judgment:
Despite these concerns, there is little authority for invalidating
Rule 68 in class actions. Rule 68 is 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, much as Rule 68's provisions fit
poorly in the class action context. Since the Supreme Court held
Rule 68 inapplicable in cases in which the defendant prevails, the
risk that defendants will make minimal offers in class actions in
order to gain the advantages of Rule 68 does not exist, and the rule
provides at least some incentive for defendants in those cases to
make reasonable and substantial offers. Settlement is not
generically undesirable in class actions, even though subject to
court control, so Rule 68's inducement to defendants to make
substantial offers should apply in such cases. There is even some
indication that the Supreme Court would disapprove any effort to
treat class actions differently for Rule 68 purposes. Accordingly,
much as some policy issues might counsel creation of an exception
to Rule 68 for class actions, the reality is that there presently is no
such exception, and Rule 68 offers have been employed in class
actions.
Id (footnotes omitted); see also Weiss v. Regal Collections, 385 F.3d 337, 444 n. 12 (3d Cir.
2004), abrogated on other grounds by Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016)
2

(noting that although courts “have wrestled with the application of Rule 68 in the class action
context,” there is “[n]o express statement limit[ing] the application of Fed.R.Civ.P. 68 in class
actions,” and that proposed amendments to make Rule 68 inapplicable to class actions have been
rejected multiple times).
Given that this case is now limited to a single FDCPA claim against a single defendant,
the maximum amount of damages available to the putative class is the lesser of $500,000 or 1%
of Defendant’s net worth. 15 U.S.C. § 1692k(a)(2)(B). This is true whether the putative class
consists of 100 class members or 100,000 class members. This was discussed extensively with
the parties at the Case Management Conference, although the attorney who filed the pending
motion did not attend said conference. In crafting the Case Management Order in this case, the
Court took into account the parties’ mutual desire to focus on the issue of Defendant’s net worth
in an attempt to resolve this case. See (ECF No. 101 at ¶ 3).
As such, the Court disagrees with Plaintiff that Defendant’s offer “serves no valid
purpose.” “The plain purpose of Rule 68 is to encourage settlement and avoid litigation.” Marek
v. Chesny, 473 U.S. 1, 5 (1985). Defendant is willing to settle this case for what it believes is the
maximum amount that Plaintiff and the putative class could recover based on its calculation of
its net worth, which, as discussed in the preceding paragraph, is not impacted by the potential
size of the class. Thus, under the circumstances of this case, Plaintiff’s concern that he has “no
information about the class and has had no opportunity to develop those facts” is overstated.
Further, based on the Court’s discussions with the parties and in consideration of Defendant’s
response in opposition to the motion, the Court rejects Plaintiff’s suggestion that Defendant’s
offer was frivolous. Defendant understandably does not want to continue incurring defense costs
or be liable for a “runaway train” of the other side’s attorney’s fees in a case that it believes

3

should be settled without any further litigation for an amount that it believes is the maximum
potential recovery. (ECF No. 110 at 3). As Defendant notes, Plaintiff is certainly free to reject
this offer and pursue an alternative calculation of Defendant’s net worth; but if Plaintiff chooses
to go down this path, he cannot avoid the risk specifically envisioned by Rule 68.
Aside from the fact that Defendant did not file the Rule 68 offer of judgment on the
docket and therefore there is nothing for the Court to strike, Plaintiff has provided no legal basis
for this Court to grant his motion to strike. As a result, it is hereby ORDERED that Plaintiff’s
motion to strike Defendant’s Rule 68 Offer of Judgment (ECF No. 105) is DENIED.
Additionally, for the reasons stated in Defendant’s brief in opposition, it is further ORDERED
that the Clerk of Court remove Plaintiff’s motion to strike, brief in support thereof, and the
attached exhibit of Defendant’s Rule 68 offer of judgment (ECF Nos. 105, 106, 106-1) from
public view.
Moreover, although this is not technically a discovery dispute, the parties are hereby
reminded of the Court’s prior instructions that they must first meet and confer regarding any
discovery disputes before involving the Court, and that if the issue remains after meeting and
conferring, they must contact the law clerk to arrange a telephone conference with the Court
before filing any discovery motions. (ECF No. 101 at ¶ 7).
IT SO ORDERED, this 10th day of March, 2017.
By the Court:
s/ Cynthia Reed Eddy
Cynthia Reed Eddy
United States Magistrate Judge
cc: all registered counsel via CM-ECF

4