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Show Me the Money! The Supreme Court Leaves Open the Possibility of Mooting Class Claim by Depositing Money to Satisfy Representative Plaintiff
5/4/16
In the recent Supreme Court case Campbell-Ewald Company v. Gomez, 136 S. Ct. 663 (2016), the Navy contracted with the advertising company Campbell-Ewald (“Campbell”) to develop a multimedia recruiting campaign. The campaign included sending text messages to a target group of young 18 to 24 year olds who previously had consented to receiving texts on topics such as service with the Navy. Mr. Jose Gomez was a recipient of one of these text messages, however he was 40 years old and had not consented to receiving such texts. Gomez brought a nationwide class action alleging Campbell violated the Telephone Consumer Protection Act (“TCPA”) by sending text messages to cell phones without having prior consent of the recipients and sought damages.
Campbell tried to get rid of the case by filing an offer of settlement pursuant to Federal Rule of Civil Procedure 68 before the motion for class certification deadline. The offer was for costs, not including attorneys’ fees, and $1,503 per message for the May 2006 message at issue, in addition to any others received subsequently, but did not admit liability. Gomez did not accept the offer. Campbell then filed a motion to dismiss for lack of subject matter jurisdiction arguing no Article III case or controversy remained because the offer of judgment mooted Gomez’s individual claim by providing him complete relief. Additionally, Campbell argued the putative class claims had become moot because Gomez’s individual claim became moot before any class was certified. After limited discovery and a summary judgment motion on discrete sovereign immunity related grounds, eventually the Supreme Court granted certiorari to resolve the issue over whether an unaccepted offer can moot a plaintiff’s claim, thus depriving federal courts of Article III jurisdiction. The Court held that “an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case, so the District Court retained jurisdiction” to adjudicate the plaintiff’s complaint. 136 S. Ct. at 672. The Court left open the issue of whether the result would be different “if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” Id.
Consequently, as reported previously, it still may be possible to force settlement of a class action by offering full relief to the named plaintiff if the full amount of plaintiff’s claim is deposited into an account payable to the plaintiff. The lower courts are grappling with this issue now. If you have any questions or need help with a TCPA case, please contact one of our attorneys for guidance.
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