Saturday, October 8, 2011

FYI: Ill App Ct Holds Offer of Full Tender Prior to Motion for Class Cert Moots Putative Class Action

The Illinois Appellate Court for the First District recently held that a
class action was moot, because the defendants offered the plaintiffs the
full amount of the damages they sought prior to the plaintiffs' filing for
class certification.

A copy of the opinion is available at:

Former hourly employees of McDonalds franchises filed a class action
lawsuit against the owner-operators of those franchises, alleging various
violations of the Illinois Minimum Wage Law and Illinois Minimum Wage
Payment and Collection Act. Before the plaintiffs sought to certify
their class, the defendants offered to pay the plaintiffs the damages they
sought, plus interest. The plaintiffs rejected the offer.

The defendants moved to dismiss the action on the grounds that it was
moot. Plaintiffs filed a motion for class certification. The circuit
court held that the action was moot, and plaintiffs appealed.

The Court began its analysis by examining recent developments in Illinois
case law concerning class actions. It noted that until recently, the
general rule in Illinois provided that where the defendant offers the full
relief requested prior to the certification of the class, the action must
be dismissed as moot. See Akinyemi v. JP Morgan Chase Bank, N.A., 391
Ill. App. 3d 334, 339 (2009). In addition, an exception to that rule
provided that the plaintiff may proceed with a class action despite full
tender, where "(1) the defendants did not become aware of the class action
after the tender and (2) the plaintiff pursued his or her class action
with 'reasonable diligence.'" Id. at 340.

However, the Illinois Supreme Court recently held that a plaintiff who did
not seek certification of her class action claim prior to a tender of full
relief could not proceed with the action, regardless of whether the
plaintiff exercised "reasonable diligence." Barber v. American Airlines,
Inc., 241 Ill. 2d 450 (2011). Thus, the Illinois Supreme Court explicitly
overruled the exceptions.

Neither party disputed that the offer of tender was made prior to the
plaintiffs' motion for class certification. Consequently, the Appellate
Court held that the plaintiffs' cause of action was moot.

The plaintiffs sought to avoid this result by arguing that the tender
amounts were not specific and were not actually given to them. The
Appellate Court disagreed, noting that Illinois case law defines "tender"
as an unconditional offer to pay, and further that plaintiffs are not
permitted to continue a controversy simply by refusing the offer.

Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874

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