Pitts v. Terrible Herbst, Inc.

A Rule 68 offer of judgment to the class representative does not render a class action suit moot when the representative may still timely file for class certification. Such filing will relate back to the date the claim was filed.

Pitts filed a class action suit against Terrible Herbst, Inc. (“Terrible”) in April 2009, claiming it had neglected to pay him and other employee’s minimum wages and overtime. The district court ordered the conclusion of discovery by January 2010. Pitts filed a motion to compel discovery in December 2009 because Terrible had refused to produce certain documents. When the magistrate’s decision was delayed, Pitts requested and received an extension until April 2010. Meanwhile, Terrible proposed a Rule 68 offer of judgment, in which Pitts would receive $900 plus attorney’s fees. When Pitts rejected the offer, Terrible filed a motion to dismiss, claiming that the offer of judgment rendered the case moot. The district court dismissed Pitts’ entire action for lack of subject matter jurisdiction because he failed to seek class certification in a timely manner. The Ninth Circuit held that an unaccepted offer of judgment does not moot a claim as long as the plaintiff may still file a motion for class certification, which would relate back to the filing date of the complaint. Pitts was entitled to file such a motion because of his need to wait for the magistrate’s ruling on the motion to compel. The Court further held that the district court erred in refusing to allow Pitts to amend his complaint to abandon his FSLA claim, which could not be filed in the same action as a related Rule 23 class action claim. Finally, the Court ruled that Pitts had made a legitimate common-law breach of contract claim and that the district court erred in substituting a Nevada statute and dismissal based on the theory that the statute abrogated the contract claim. REVERSED and REMANDED.