Illinois Supreme Court confirms that tender of amount sought before class certification motion moots claim

The Illinois Supreme Court in Joiner v. SVM Mgmt., LLC, 2020 IL 124671 (Feb. 21, 2020) affirmed that a plaintiff’s class action claims are moot where the requested damages and fees are tendered to the name plaintiff before a motion for class certification is filed. In effect, it allows a defendant to “pick off” a class representative, a practice not allowed in federal court.

The plaintiffs in Joiner were tenants who sued their property management company for not paying interest on their security deposit after they moved out in violation of the Illinois Security Deposit Interest Act (Deposit Act). The tenants filed class action and individual claims but did not file a class-certification motion with their complaint. The management company responded by tendering plaintiffs’ requested damages and attorney fees which the tenants refused. The management company then moved to dismiss on the basis that by making the tender of payment all of the claims were moot. It cited Illinois case law which long held that when a defendant tenders the full amount requested by a plaintiff purporting to represent a class before the named plaintiff files a class-certification motion, the plaintiff’s claim becomes moot.

The trial court agreed and its decision was upheld on appeal. The Supreme Court accepted the case to decide if the long-standing Illinois rule was affected by evolving federal precedent and the U.S. Supreme Court’s decision in Campbell-Ewald Co. v. Gomez, 577 U.S. ––––, 136 S. Ct. 663, 193 L.Ed.2d 571 (2016).

The Court observed that the federal and Supreme Court decisions cited by the tenants all arose out of the situations where the defendant made an offer of judgment pursuant to Fed. R. Civ. Pro. 68. Rule 68 authorizes a defendant to serve on an opposing party an offer to allow judgment on specified terms and allows the plaintiff to accept or reject that offer. An unaccepted offer is considered withdrawn and withdrawn offers (unlike common-law tenders) cannot be used in court as an admission against defendants.

Illinois has no offer of judgment rule. Rather, it has a rule which provides that a defendant must “tender what he or she shall conceive sufficient amends for the injury done or to pay the unliquidated damages or demands” to shift costs to the plaintiff. The federal rule expressly contemplates a plaintiff’s choice to accept or decline such an offer. Illinois’ rule does not. Because Illinois’ rule contemplates a tender rather than an offer, it does not consider the effect of a failure to accept but only the effect of a plaintiff achieving or failing to achieve a greater award at trial. A tender is only effective if it is for the entire amount owed. The defendant must actually produce the tender; a mere offer or promise is insufficient

Thus, when a defendant tenders the relief sought by a named plaintiff prior to a motion for class certification, it does not force the plaintiff to accept a settlement against her will, as the tenants argued, but admits liability and satisfies their demand. A live controversy therefore no longer exists, and the court must dismiss the case if no other plaintiff steps into the named plaintiff’s shoes to represent the class.

Although the lower court’s decision was affirmed, the case was remanded to the trial court to determine the plaintiff’s costs and attorney fees and whether the tender satisfied the tenants’ claim. To avoid future disputes, the Court said that where future tenders are made to satisfy a demand after filing of suit, it should be made to the court. If the tender fully satisfies the plaintiff’s demand absent costs and attorney fees, the court could then hold a hearing on costs and, if applicable, attorney fees before dismissing the case contingent upon payment of costs and fees.

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