SCOTUS Holds that Unaccepted Offer of Judgment Does Not Moot Plaintiff’s Case


By: Matt Foree

Yesterday, the Supreme Court of the United States issued its opinion in the Campbell-Ewald Co. v. Gomez case.  In that opinion, the Court held that an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case, such that the District Court retained jurisdiction to adjudicate the plaintiff Gomez’s complaint after he did not accept a settlement offer and offer of judgment in satisfaction of his Telephone Consumer Protection Act claims.  The six-to-three decision was delivered by Justice Ginsburg with Justices Kennedy, Breyer, Sotomayor and Kagan joining in the opinion of the Court.  Justice Thomas filed an opinion concurring in the judgment.  Chief Justice Roberts filed a dissenting opinion in which Justices Scalia and Alito joined.  Justice Alito filed a separate dissenting opinion.

In its opinion, the Court determined that, under its Article III case law, a case becomes moot only when it is impossible to grant any effectual relief to the prevailing party. The Court ultimately adopted Justice Kagan’s analysis in her dissent in the Genesis Healthcare case, noting that every Court of Appeals ruling on the issue since Genesis also ruled that way.  In that dissent, Justice Kagan asserted that an unaccepted settlement offer, like any unaccepted contract offer, is a legal remedy with no operative effect.  She stated that nothing in Rule 68 alters that basic principle and noted that the Rule specifies that an unaccepted offer is considered withdrawn.  In sum, the Court held that, under basic principles of contract law, defendant Campbell-Ewald Co.’s (“Campbell”) settlement bid and offer of judgment, once rejected, had no continuing efficacy.  So, without Gomez’s acceptance, the settlement offer remained only a nonbinding proposal such that the District Court retained jurisdiction to adjudicate Gomez’s complaint.

Chief Justice Roberts’s dissent echoed his tough questioning during oral argument.  He states that Campbell offered to pay Gomez the maximum amount that he could recover under the TCPA, but it turns out that Gomez wants more: “he wants a federal court to say he is right.”  The Chief Justice continued by stating that “[t]he problem for Gomez is that federal courts exist to resolve real disputes, not to rule on a plaintiff’s entitlement to relief already there for the taking.”  He concludes that if there is no actual case of controversy, the lawsuit is moot and the power of the federal court to declare the law has come to an end.

Chief Justice Roberts specifically took issue with the majority’s placing responsibility of whether a case is moot in the hands of the plaintiff. He states that a plaintiff is not the judge as to whether or not federal litigation is necessary.  He observed that, although Gomez was offered full relief as the District Court found, Gomez nevertheless wants to continue litigating.  But the issue, he states, is “not what the plaintiff wants, but what the federal courts may do.”  He continues, stating, “It is up to the courts to decide whether each party continues to have the requisite personal stake in the lawsuit, and if not, to dismiss the case as moot.”  He argues that the Court “takes that important responsibility away from the federal courts and hands it to the plaintiff.”

The majority opinion specifically notes that it does not decide “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,” as this question is reserved for another time. Chief Justice Roberts considers this good news, as the majority’s analysis may have come out differently if Campbell had deposited the funds that it offered to Gomez with the District Court.

As reported previously, TCPA defense attorneys anxiously awaited the Court’s decision in this matter in hopes that it would provide an additional defense to TCPA claims.  It remains to be seen whether TCPA defendants will take the Court’s cue and deposit funds in accounts as part of settlement offers and whether such action will actually result in a different result.  Until then, defenses to TCPA claims remain very limited.