On August 6, 2015, in Chapman v. First Index, Inc., Nos. 14-2773 & 14-2774 (7th Cir. Aug. 6, 2015), the Seventh Circuit reversed course and overruled its prior holding in Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011).  In doing so, the Seventh Circuit held that a rejected offer of judgment under Federal Rule of Civil Procedure 68, even if it offers “complete relief” to the plaintiff, does not moot a plaintiff’s claim. 

The court noted that an “offer of judgment” requires the district court to enter judgment in favor of the plaintiff.  But if a defendant’s offer of judgment provided complete relief and could truly render a case moot, a district court could never actually enter the judgment (as a court cannot enter a judgment in a moot case).  Instead, all the court is permitted to “do is dismiss for lack of a case or controversy.”  Accordingly, the Seventh Circuit overruled its prior decision in Damasco (and similar cases), where the court held that a rejected offer of judgment that provided complete relief to the plaintiff could moot a case. 

A full copy of the Seventh Circuit’s decision is available here.