Introduction
Defending a putative consumer class action in a federal district court within the Seventh Circuit? Has the named plaintiff filed a motion for class certification yet? If not, Seventh Circuit jurisprudence provides a powerful tool for class action defendants that could result in the dismissal of all claims brought by a named plaintiff, including the putative class claims, early in the litigation.

The Tender Doctrine
Seventh Circuit jurisprudence has developed a unique doctrine that may be an effective alternative to Rule 68 of the Federal Rules of Civil Procedure. [1] Specifically, it is well established in the Seventh Circuit that “once the defendant offers to satisfy the Plaintiff’s entire demand, there is no dispute over which to litigate” and, regardless of whether a plaintiff accepts or rejects the offer, plaintiff’s claims are moot, and the court has been divested of jurisdiction. [2] Accordingly, in a class action brought in a district court located in the Seventh Circuit, where no motion for class certification is on file, a tender that provides full and complete relief may “terminate[] the suit” in its entirety. [3]

A successful tender may be made by sending a letter to the named plaintiff tendering the entire individual relief that he or she has demanded. There is no requirement that a defendant tender actual funds or obtain a receipt, or that the plaintiff accept the tender. Of course, if the tender is accepted, the defendant must be prepared to make the offered payment. Either way, if the tender is served prior to the filing of a motion for class certification, the burden shifts to the plaintiff to establish jurisdiction by competent proof, that is, to prove that the tender is insufficient (presumably, a plaintiff would not - and could not - challenge the sufficiency of a tender if he or she has accepted it). [4]

Seventh Circuit decisions suggest that the key to a successful tender is being sure to tender “full relief,” meaning that a defendant should carefully consider the plaintiff’s individual request for relief and tender funds or other relief sufficient to satisfy all of the elements of that request. Courts have found that an offer consisting solely of what the defendant thinks the plaintiff is entitled to does not render the case moot. [5] Two areas in which defendants could falter are punitive damages and attorneys’ fees.

As to punitive damages, plaintiffs have argued that defendants’ tenders were insufficient to cover a punitive damages multiplier higher than what the plaintiff could conceivably be awarded on his or her individual claims at trial. The U.S. Supreme Court has acknowledged that punitive damages in an amount “four times the amount of compensatory damages might be close to the line of constitutional impropriety.” [6] The Seventh Circuit, however, has observed that a higher multiple may be appropriate where “the expected award of compensatory damages is so small that it would be unlikely to induce a suit even if there are multiple victims….” [7] Generally speaking, punitive damages awards are highly fact-specific and class action defendants contemplating a tender should consider the facts at issue and consult the appropriate case law to determine what punitive damages multiplier may be appropriate. 

With respect to attorneys’ fees, litigants have raised the question of whether a tender is insufficient solely on the ground that it may not cover all of the attorneys’ fees incurred by the plaintiff’s lawyer to date in the litigation.  This issue is particularly relevant when the claims are brought under a statute that awards attorneys’ fees to the successful plaintiff. [8] The Seventh Circuit has answered this question in the negative, holding that “an interest in attorneys’ fees is insufficient to create a case or controversy when none exists on the merits,” reasoning that attorneys’ fees cannot keep a case alive post-tender where the recovery of those fees is merely “ancillary” to the merits and indeed conditioned upon success on the merits. [9] Moreover, even if a defendant chooses to tender some amount to cover fees and/or costs to ensure they have offered “full” relief, district courts within the Seventh Circuit have held that defendants need not tender specific amounts; tendering “reasonable” costs or attorneys’ fees, to be determined by the court later, is sufficiently definite to moot the plaintiff’s individual claims. [10]

Conclusion
Case law suggests that when a company is hit with a putative class action in a district court within the Seventh Circuit and the complaint is not accompanied by a motion for class certification, it should immediately evaluate the relief sought by, and available to, the named plaintiff on an individual basis.  If those damages are reasonably calculable or identifiable, and no motion for class certification is on file, the tender doctrine provides a potential avenue for early resolution of the named plaintiff’s litigation on jurisdictional grounds.