KAYMARK v. UDREN LAW OFFICES, P.C.

Filing 116

MEMONARDUM ORDER denying 112 Motion for Reconsideration filed by Plaintiff. Signed by Magistrate Judge Cynthia Reed Eddy on 3/22/2017. (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.

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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 for reconsideration and brief in support
thereof (ECF Nos. 112, 113) of this Court’s Memorandum Order from March 10, 2017 (ECF No.
111), which denied Plaintiff’s motion to strike a Rule 68 offer of judgment made by Defendant
on February 7, 2017, (ECF Nos. 105, 106). Defendant responded in opposition to Plaintiff’s
motion on March 22, 2017. (ECF No. 115). For the reasons that follow, the motion for
reconsideration will be denied.
The parties agree that motions for reconsideration are governed by the following
standard: a court will not grant a motion for reconsideration unless there has been (1) an
intervening change in controlling law, (2) the emergence of new evidence not previously
available, or (3) the need to correct a clear error of law or to prevent manifest injustice. Max’s
Seafood Café ex rel. Lou-Ann, Inc. v. Quinteros, 167 F.3d 669, 677 (3d Cir. 1999). Plaintiff
makes no arguments with respect to the first two scenarios, and instead focuses on the third
scenario. In this regard, mere disagreement with the Court’s prior ruling is an insufficient basis
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to satisfy that there was a clear error of law or that the motion is necessary to prevent manifest
injustice. Forta Corp. v. Surface-Tech, LLC, 2015 WL 12777653, *2 (W.D. Pa. 2015). Motions
for reconsideration should only be granted “sparingly” and are to be “strictly reviewed” by
district courts. Velazquez v. UPMC Bedford Memorial Hosp., 338 F.Supp.2d 609, 611 (W.D. Pa.
2004).
In the Court’s underlying Memorandum Order, the Court rejected Plaintiff’s argument
that the Rule 68 offer of judgment made before class certification was premature and
incompatible with Rule 23. The Court noted that although there may be legitimate policy
concerns that counsel against Rule 68’s application in class actions, “the reality is that there
presently is no such exception, and Rule 68 offers have been employed in class actions.”
(Memo. Order at 1-2, ECF No. 111) (quoting 12 Charles Alan Wright & Arthur R. Miller, Fed.
Prac. & Proc. Civ. § 3001.1 (2d ed.)). In his motion for reconsideration, Plaintiff makes three
arguments as to why his motion should be granted: (1) courts within this Circuit have entertained
and granted motions to strike unfiled Rule 68 offers of judgment that interfered with Rule 23
safeguards; (2) this Court’s order does not address the inability of the named Plaintiff to accept
this Rule 68 offer of judgment on behalf of the putative class; and (3) there has been no
discovery regarding the relevant issue of Defendant’s net worth to allow Plaintiff to consider
whether to accept the offer. These arguments will be addressed seriatim.
As to the first argument, Plaintiff cites several district court cases in which courts have
stricken Rule 68 offers of judgment prior to class certification. However, the cases cited by
Plaintiff involved situations in which the defendant was trying to “pick-off” the named plaintiff
prior to class certification with “the purpose to dampen the efforts of the putative representative
in pursuing the class action, if not to cause her to withdraw,” and “an attempt to inject a conflict

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of interest between her and those she seeks to represent.” See Zeigenfuse v. Apex Asset Mgmt.,
LLC, 239 F.R.D. 400, 403 (E.D. Pa. 2006); Strausser v. ACB Receivables Mgmt, Inc., 2007 WL
512789 (E.D. Pa. 2007); Smith v. NCO Fin. Sys., 257 F.R.D. 429, 433-34 (E.D. Pa. 2009); Boles
v. Moss Codilis, LLP, 2011 WL 4345289 (W.D. Texas 2011). In contrast, the Rule 68 offer of
judgment at issue in this case was not made with the purpose to pick-off Plaintiff as the named
representative because the offer was made to both Plaintiff and the putative class. Plaintiff cites
no cases in which a court struck a Rule 68 offer of judgment in this situation. Although Plaintiff
may disagree with the Court’s conclusion in declining to craft an exception to Rule 68 prior to
class certification at this stage of the proceedings, he has failed to demonstrate that this was a
clear error of law or that manifest injustice will occur as a result of this argument being rejected.
The Court also rejects Plaintiff’s second argument – that the Court should grant his
motion for reconsideration because the Court did not address Plaintiff’s inability to accept the
Rule 68 offer of judgment on behalf of a putative class. Quoting Wright & Miller, the prior
Memorandum Order stated, “[s]ettlement 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.” (Memo. Order at 2) (quoting Fed. Prac. & Proc. Civ. §
3001.1) (emphasis added).

Further, the Court noted that despite the policy concerns of

approving settlement in the class action context under Rule 23, “the reality is that there presently
is no such exception [to Rule 68 for class actions], and Rule 68 offers have been employed in
class actions.” Id. at 1-2. Although the Memorandum Order may not have directly addressed
this argument regarding Plaintiff’s ability to accept the Rule 68 offer of judgment, it implicitly
rejected it. Like all other settlements reached between the parties in a putative class action prior
to certification, an accepted Rule 68 offer of judgment would be provisional and subject to Rule

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23’s requirements.1 Plaintiff has failed to demonstrate why the Court should strike the Rule 68
offer of judgment merely because he could not accept it outright and the acceptance would be
subject to Rule 23 like all other class settlements prior to class certification. Plaintiff has failed
to convince the Court in the pending motion that a clear error of law was made or that acceptance
of this argument is necessary to prevent manifest injustice.
Finally, Plaintiff argues that we should strike the Rule 68 offer of judgment because he
has not had the benefit of discovery regarding the issue of Defendant’s net worth.2 Plaintiff
argues that because Defendant has not provided any evidence to verify its stated net worth, the
Rule 68 offer of judgment should be stricken as premature. However, he cites no case law in
support of his argument that a Rule 68 offer of judgment made in the beginning of the discovery
period should be stricken as premature. As explained by the Supreme Court, the plain purpose of
Rule 68 is to encourage settlement and avoid costly protracted litigation. Marek v. Chesny, 473
U.S. 1, 5 (1985); Detla Air Lines, Inc. v. August, 450 U.S. 346, 379 (1981). Thus, Rule 68
specifically encourages early settlements. Staffend v. Lake Central Airlines, Inc., 47 F.R.D. 218,
219 (N.D. Ohio 1969).

The Court is unaware of any rule providing that Rule 68 offers of

judgment cannot be made in the beginning of the discovery period prior to the parties engaging
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Indeed, it is certainly not uncommon for the parties in a class action to reach settlement prior
to class certification. See In re General Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab.
Litig., 55 F.3d 768, 777-78 (3d Cir. 1995) (“Usually, the request for a settlement class is
presented to the court by both plaintiff(s) and defendant(s); having provisionally settled the case
before seeking certification, the parties move for simultaneous class certification and settlement
approval.”). “The standard procedure in these instances is for courts to 1) provisionally certify
the class, such that proper notifications can be disseminated to the class at large, and then 2) hold
a final fairness hearing in order to issue a final class certification and approve the settlement.” In
re: Amtrak Train Derailment in Phila., Pa., 2016 WL 1359725, *2 (E.D. Pa. 2016).
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As explained in the prior Memorandum Order, regardless of the putative class size, “the
maximum amount of damages available to the putative class is the lesser of $500,000 or 1% of
Defendant’s net worth.” (Memo. Order at 3) (citing 15 U.S.C. § 1692k(a)(2)(B)). Plaintiff
acknowledges that the size of a potential settlement class is not a relevant issue to the Rule 68
offer of judgment in this case.
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in all of the discovery that the plaintiff may wish to have for purposes of evaluating the offer. As
the Court noted in the prior Memorandum Order, “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 should be settled without any further litigation for an amount that it
believes is the maximum potential recovery.” (Memo Order at 3-4). Because this argument
raised by Plaintiff is not supported by any legal argument, he has failed to establish that the
Court committed a clear error of law or that the decision resulted in manifest injustice.
In accordance with the foregoing, Plaintiff’s motion for reconsideration is DENIED.
Under the circumstances, the Court notes that rather than filing motions for reconsideration to
such nondispositive matters, the proper course is to file objections to the assigned District Judge.
28 U.S.C. § 636(b); Fed.R.Civ.P. 72(a). The deadline to file objections is 14 days from the date
of the Order. Id. Thus, because the prior Memorandum Order was entered by the Court on
March 10, 2017 (ECF No. 111), objections to the prior Memorandum Order are due by March
24, 2017, unless extended by the District Judge. The deadlines for filing objections to this
Memorandum Order are due by April 5, 2017. Failure to file objections will waive the right to
appeal.
SO ORDERED, this 22nd 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

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