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New York Federal Court Interprets Supreme Court’s Gomez Pick-Off Strategy Opinion Broadly; Declines Employer Request to Deposit Funds with Court to Moot Class Action Claim

Last month, we wrote about the Supreme Court’s opinion in Campbell-Ewald Co. v. Gomez, in which the Court ruled that “an unaccepted Rule 68 Offer of Judgment for complete relief does not moot a plaintiff’s individual and class action claims.”  While that decision was welcome news and remains welcome news for employees because it all but eliminated the employer-favored named plaintiff “pick-off” strategy, the Supreme Court did appear to leave open the possibility that employers could still pick off a named plaintiff in other ways: by either actually paying them the amounts allegedly owed, or similarly, by depositing the money with the court to be released to the plaintiff upon dismissal of the action.  Just weeks later however, a New York Federal Court addressed this residual issue – the result: more welcome news for employees.

In Brady v. Basic Research, L.L.C., the defendants moved under Federal Rule of Civil Procedure 67 for permission to deposit funds with the Court Clerk “consistent with the Rule 68 offer of judgment that [they] previously made to Plaintiffs.”  The court quickly picked up on the fact that the defendants were seizing on the language from Justice Alito’s dissent in the Supreme Court’s Gomez decision in order to moot the named plaintiffs’ claims and avoid a class action.  But the court denied the Rule 67 application saying that Rule 67 is there to relieve a depositor of the burden of administering an asset and not to moot a case.  And the court went further: it said that the use of Rule 67 motion to moot a claim would run contrary to the Supreme Court’s directive that a named plaintiff be “accorded a fair opportunity to show that certification is warranted” (emphasis in the original).  In other words, the pick-off strategy can’t work under these circumstances because the plaintiff has to be given an opportunity to seek certification – a broad interpretation of Gomez

Of course this is just one court (an Eastern District of New York court) that has foreclosed the possibility of using the pick-off strategy under these circumstances.  We will be monitoring to see what other courts have to say on this issue and will report back.


Special thanks to Kevin McGinty for contributing to this post.

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