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Friday, March 25, 2005

Offer of judgment and mootness. Trans Union, L.L.C. issued a credit report about Peter McCauley that was incorrect and prevented him from getting a certain student loan. He had to borrow that money and accrued damages of $240. He sued Trans Union. Trans Union made an offer of judgment for the entire $240 plus court costs, but it was rejected. It moved for summary judgment, claiming that there was no longer any case or controversy between the parties. The District Court noted McCauley, at the time the offer was made, had potentially been entitled to punitive damages, but determined that he was no longer entitled to such damages (presumably because Trans Union was willing to pay) and that if Trans Union repeated its offer, and McCauley declined to accept it, another summary judgment could be made. Trans Union made another offer in the same amount. The offer stated that there was no admission of guilt and that the judgment should be confidential. McCauley rejected it and, upon a second summary judgment, the Court dismissed the case. McCauley appealed the case pro se and won. The Court held that the dismissal made no sense. Trans Union admitted that it owed McCauley $240. It made a conditional offer. McCauley was not obligated to agree to the conditions, but in not doing so, he wound up with nothing even the amount that Trans Union admitted it owed. The Court concluded that the rejected settlement offer did not moot the case so as to warrant judgment in favor of Trans Union. The Court remanded the case to the District Judge for the purpose of entering a default judgment. Both parties had agreed at oral argument that such a solution would satisfactorily resolve the case. The decision in McCauley v. Trans Union, L.L.P. can be found here.

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