Reversing 10 years of Illinois appellate court precedent, the Illinois Supreme Court in Barber v. American Airlines, Inc., No. 110092 (Ill. Mar. 24, 2011), held that class action defendants are allowed to "pick off" named plaintiffs by paying their individual claims, thereby mooting putative class actions before they can even get started. The court established a bright line rule that allows such early attempts to moot a class action so long as no class certification motion is on file. But once a class certification motion is filed, a defendant cannot moot a class action in this manner without first giving the court the opportunity to rule on the pending motion.

In Barber, the plaintiff filed a class action lawsuit against American Airlines seeking to recover a $40 checked baggage fee, which the airline's counter agent had refused to refund even though her flight had been cancelled. The lawsuit was filed just four days after the plaintiff's cancelled flight and there was no indication that she had made any additional effort to contact the airline or to investigate whether the agent's refusal to refund her baggage fee represented the official policy of the airline. Two weeks after being served with the complaint, American Airlines contacted the plaintiff's counsel and offered to refund the $40 fee. Plaintiff's counsel declined the offer. Three weeks later, American Airlines refunded the $40 to the plaintiff's credit card and subsequently informed the plaintiff's counsel that it had done so. At no time during this exchange did the plaintiff's counsel file a motion for class certification in the lawsuit. The trial court subsequently dismissed the lawsuit on mootness grounds because the $40 fee had been repaid. In a split decision, the appellate court reversed the trial court, with the majority holding that the plaintiff should have been given a reasonable opportunity in which to file her class certification motion. However, the Illinois Supreme Court reversed the appellate court's decision, holding that the case was moot because the plaintiff had not filed a class certification motion at the time of the tender.

Before the Illinois Supreme Court's decision in Barber, Illinois appellate courts generally had prevented defendants from "picking off" the named plaintiff, even when a motion for class certification had not yet been filed. These courts determined that it was bad public policy to allow defendants to moot class actions by paying off the named plaintiff's individual claim without first giving him or her a reasonable opportunity to bring a class certification motion. As a result, most defendants who attempted to moot class actions in this manner were rebuked by the Illinois trial and appellate courts, and those courts gave class representatives a "reasonable" time period (usually a period of a few months) in which to bring their class certification motions.

However, the Illinois Supreme Court in Barber expressly overruled this appellate court precedent and rejected those courts' holdings that plaintiffs should have a reasonable opportunity to file a class certification motion. The Illinois Supreme Court reasoned that the appellate court precedent was based on a misreading of its prior decision in Wheatley v. Board of Education of Township High School District 205, 99 Ill. 2d 481 (1984). According to the Barber decision, "Wheatley teaches that the important consideration in determining whether a named representative's claim is moot is whether that representative filed a motion for class certification prior to the time when the defendant made its tender." Thus, where a defendant tenders the full amount of the individual claim to the named plaintiff before a class certification motion is filed, "the interests of other class members are not before the court, and the case may properly be dismissed." (internal citations omitted).

The Illinois Supreme Court addressed - and rejected - the public policy concerns in allowing a defendant to prevent class action litigation by "picking off" the named plaintiff before there is an opportunity to protect the interests of absent class members. The court determined that "there is no prohibition against settlements with class members as long as the rights of nonsettling class members are not affected. . . . The remaining class members can either pursue class litigation or bring their claims individually." (internal citation omitted).

The immediate practical ramification of the Barber decision is that defendants may be able to catch certain plaintiffs' counsel off guard and moot their putative class actions by paying off the named plaintiff's individual claim before a class certification motion is filed. While the plaintiff's counsel may be able to find a substitute class representative, that is not always an easy thing to do, especially without the benefit of class discovery. Thus, at least in the short term, Barber may provide class action defendants with a powerful weapon to moot their cases. On the plaintiff's side, class counsel will be encouraged to file and serve a class certification motion simultaneously with the complaint and summons, so as to avoid the case being mooted by a nominal payment to the named plaintiff. Sophisticated class plaintiffs' firms often employ this technique already for precisely these reasons.

For further information about the Barber decision and its effect on class action practice in Illinois, please contact Henry Pietrkowski at Reed Smith LLP. Mr. Pietrkowski is a partner in the firm's Financial Industry Group and has defended dozens of consumer class actions in Illinois courts and across the country. He also is an author of the ABA's publication, How to Defend a Consumer Class Action Without Breaking the Bank. 

Client Alert 2011-072