Fourth District, Division 1 So Rules, Assuming 998 Offers Are Valid in a Certified Class Situation.
Nelson v. Pearson Ford Co., Case No. D054369 (4th Dist., Div. 1 July 15, 2010) (certified for publication) is an interesting decision where significant fees were awarded in a class action involving a California consumer-shifting fee statute. However, because there were some partial reversals, that fee award had to be revisited. Nevertheless, the discussion of the Code of Civil Procedure section 998 issue deserves our attention.
Following certification of the matter as a class action, defendant sent a 998 offer to the class representative for a sum certain, even though the representative represented two classes. After assuming (but not deciding) that 998 offers can be made in a certified class action, the appellate court agreed with the lower court that the defense pretrial settlement offer was invalid. The reason? The lump sum offer was made to a class representative of two classes. By analogy to cases invalidating lump sum offers to separate parties in normal actions, the Fourth District, Division 1 found no logical reason foreclosed extending this analogous jurisprudence to a 998 offer made to multiple but separate classes. That meant the class representative faced the same uncertainty confronting separate parties in conventional litigation. 998 offer found invalid.
BLOG UNDERVIEW—We will note the absence of California case law on how 998 offers are to be treated in putative and certified class actions. Nelson assumed 998 offers are valid in class actions, but this premise needs to be fleshed out in future cases.