Unaccepted Rule 68 offer does not result in mootness

Plain old contract law. Plain old "read what the rule says." The 9th Circuit got it right today when it ruled that "an unaccepted Rule 68 offer that would have fully satisfied a plaintiff's claim does not render that claim moot." Diaz v. First American Home Buyers (9th Circ 10/04/2013).

Diaz brought a class action -- which included lots of legal claims -- due to her unhappiness about First American's home warranty plan. The trial court dismissed some of the claims, and also denied class certification.

First American then made an offer of judgment under Federal Rule 68 to pay the entire amount of her remaining individual claims. However, Diaz did not accept the offer.

Every first year law student knows that an unaccepted offer is a legal nothing. As Justice Kagan put it, dissenting in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013):

An unaccepted settlement offer – like any unaccepted contract offer – is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer “leaves the matter as if no offer had ever been made.”

Justice Kagan also emphasized that nothing in Rule 68 authorizes a court to enter judgment in accordance with an unaccepted offer.

So the 9th Circuit took ordinary contract law plus the text (or absence of text) of Rule 68 and decided that Diaz's claims remain alive, and her case is not moot.

This appears to be the minority view among the federal circuits, yet it is the correct view.

By the way, don't rely on Genesis Healthcare for much. That case did become moot because the employee conceded that her individual claims were mooted by an unaccepted Rule 68 offer. As the US Supreme Court said, "We, therefore, assume, without deciding, that [Genesis Healthcare's]  Rule 68 offer mooted [Symczyk's] individual claim."