In a recent case in the United States District Court for the Northern District of California, a plaintiff brought a putative class action alleging that defendants, a creditor and a debt collection firm, sent debt collection notices that failed to disclose the current creditor’s name in violation of the Fair Debt Collection Practices Act (“FDCPA”) and the California equivalent.  One defendant made an offer of judgment to the plaintiff pursuant to Federal Rule of Civil Procedure 68, offering her $3,500 to resolve her individual claim along with attorney’s fees and costs. Plaintiff moved to strike the offer, arguing that it did not provide relief to the putative class but was instead an attempt by the defendant to pick off the class representative before the class was certified. Defendant argued that the motion was procedurally improper because an offer of judgment is not a pleading and had not been filed with the Court and because nothing in the Federal Rules precludes such Rule 68 offers of judgment in class actions.

The Court agreed with the defendant and denied plaintiff’s motion to strike as procedurally improper because the offer of judgment had not been filed with the court. Furthermore, the Court noted that, under Ninth Circuit precedent in Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011), an offer of judgment made prior to certification does not moot putative class claims. The Court noted that although a Rule 68 offer of judgment might create a conflict of interest for a plaintiff, such an offer is allowed under the Rules.

Next, the Court addressed plaintiff’s motions to strike defendants’ affirmative defenses. Defendants argued that the heightened “plausibility” standard set forth in Twombly and Iqbal did not apply to affirmative defenses in their answers; the Court disagreed. The Court noted that, although circuit courts have not yet ruled on the issue, many district courts have applied the heightened standard to require that a defendant’s pleading must put a plaintiff on notice of the factual basis for its defenses. The Court granted the motions to strike certain affirmative defenses as insufficiently pled under Twombly and Iqbal.  It also granted the motions to strike other affirmative defenses that had been waived, as well as defendants’ argument for “failure to state a cause of action” because it is not an affirmative defense.

Jacobson v. Persolve, LLC, No. 5:14–CV–00735 (N.D. Cal. Aug. 19, 2014).