Campbell-Ewald, however, did not completely bar defendants’ ability to moot class actions by making the named plaintiff whole. Justice Ginsburg’s majority opinion spoke only to offers of future payment, explicitly reserving judgement on situations in which “a defendant deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” So Bisco did just that. Bisco motioned for leave to deposit $3,600 with the court under Rule 67, which states that “a party—on notice to every other party and by leave of court—may deposit with the court all or part of the money or thing” that plaintiff has requested. Bisco argued that the amount reflected full compensation (Fulton’s maximum possible damages plus $595 in costs) and thus mooted Fulton’s case. Agreeing with Bisco, the district court granted Bisco’s motion to deposit funds and explained that once judgment had been entered, Fulton’s case would be moot.

The Seventh Circuit reversed on appeal. According to Chief Judge Wood’s opinion, a Rule 67 deposit cannot moot a case because the plaintiff only receives the money if the court issues a judgment—which is precisely what a court cannot do if the case is moot. The opinion explains that a “decision that a certain amount of damages should be paid and that an injunction should be entered is quintessentially a ruling on the merits of a case,” but “once the case is moot, the court lacks power to enter any judgment on the merits.” The Seventh Circuit rejected the notion that the Court telegraphed approval of Bisco’s Rule 67 move with its Campbell-Ewald’s “hypothetical”; Chief Judge Wood cautioned that courts should “take the Court at its word” when it reserves issues. Instead, the Seventh Circuit explained that its opinion was fully consistent with Campbell-Ewald, which stands for the principle that defendants cannot use unaccepted settlement offers to moot a case. Finally, the Seventh Circuit distinguished Campbell-Ewald’s hypothetical “account payable to the plaintiff” from a deposit under Rule 67, which allows the court to function as an “escrow agent” but does not, in of itself, designate plaintiff as the owner of the deposited funds.  

But while the Seventh Circuit closed the door on mootness, it left open a window for defendants seeking to avoid class actions by compensating named plaintiffs. The court explained that even though Fulton’s individual claim was not moot, Bisco’s offer could constitute an affirmative defense, such as accord and satisfaction or payment, which could make Fulton an inappropriate class representative. “[I]f it turns out that the named plaintiff really has no personal stake in the litigation,” the Seventh Circuit explained, “the district judge might well question whether it is the appropriate champion for the class.”

Two other circuit courts have considered the question of “escrow deposits” post-Campbell-Ewald. In Chen v. Allstate Insurance Co., 819 F.3d 1136 (9th Cir. 2016), the Ninth Circuit held that such deposits cannot moot the individual claims of named plaintiffs, and even if they could, circuit precedent would afford named plaintiffs a “fair opportunity” to seek class certification (for unnamed plaintiffs, whose claims are presumably not moot). The Second Circuit came to the opposite conclusion, albeit in a non-precedential opinion. In Leyse v. Lifetime Entertainment Services, LLC, No. 16-1133-CV, 2017 WL 659894 (2d Cir. Feb. 15, 2017), the court affirmed the lower court’s order entering judgment for the plaintiff—who had rejected an offer of complete relief under Rule 68—after the defendant deposited the full amount of damages with the court.  

The Seventh Circuit’s decision in Fulton Dental, LLC v. Bisco, Inc. is available here.