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Neutralizing the Putative Lead Plaintiff

InsideCounsel

John P. Kromer, James T. Parkinson, Benjamin B. Klubes

In two recent cases—Damasco v. Clearwire Corp. and Pitts v. Terrible Herbst, Inc—the 7th and 9th Circuits, respectively, reached conflicting results on the issue of whether an offer of judgment for the full amount of a putative lead plaintiff’s own claim moots a class action complaint if the offer predates the plaintiff’s filing of a motion to certify the action as a class. While the 7th Circuit opinion provides a road map for plaintiffs’ counsel to avoid the practical results of the ruling, it may provide certain opportunities for defendants to neutralize the putative lead plaintiff.

In Pitts, the putative lead plaintiff in a wage and hour case claimed $88in damages for himself. Prior to Pitts moving for class certification, defendant Terrible Herbst made an offer of judgment under Federal Rule of Civil Procedure 68, for $900 plus costs and a reasonable attorney’s fee. Pitts rejected the offer.

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