Consumers won an important victory in the U.S. Supreme Court recently when the court ruled that companies can’t evade class action claims by offering full relief to the named class representative. In a 6-3 ruling authored by Justice Ruth Bader Ginsburg, the Court rejected Defendant Campbell-Ewald Co.’s argument that Plaintiff Jose Gomez’s class action suit under the Telephone Consumer Protection Act (TCPA) was moot since it offered him $1,503 for each unsolicited text message he received. This offer represented more than three times the statutory amount of $500 per violation, but Gomez rejected the offer since it provided no relief to other class members.
Campbell-Ewald, an advertising partner with the U.S. Navy, appealed to the Supreme Court after the Ninth Circuit ruled in 2014 that the company could be liable for text messages it sent to about 100,000 people in 2006. The Ninth Circuit rejected the Defendant’s attempt to strategically offer individual Plaintiffs the relief necessary to make them whole at the outset of the litigation in order to avoid a potential multi-million dollar class action judgment or settlement in the future. Justice Ginsburg wrote:
We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.
Justice Ginsburg continued, with respect to class actions, “While a class action lacks independent status until certified, a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.”
The justices additionally held that Campbell-Ewald’s status as a government contractor did not entitle it to immunity from claims brought under the TCPA. “When a contractor violates both federal law and the government’s explicit instructions as here alleged, no ‘derivative immunity’ shields the contractor from suit by persons adversely affected by the violation,” the majority ruled. The decision resolves a circuit split on the settlement offer issue. It marks a follow-up to the high court’s 2013 decision in Genesis Healthcare Corp. v. Symczyk. In the Genesis case, the justices refused to rule on the question of whether full settlement offers effectively end putative class actions because the Plaintiff in that case did not dispute that the offer mooted her individual claims.
The case, Campbell-Ewald Co. v. Gomez, is in the Supreme Court of the United States. The Plaintiff was represented by Suzanne L. Havens Beckman and David Parisi of Parisi & Havens, LLP, and Adina H. Rosenbaum of Public Citizen’s Litigation Group, among others. Beasley Allen is involved in a number of class action cases filed throughout the country. For more information on our nationwide class action practice, contact Dee Miles, Archie Grubb, or Andrew Brashier at 800-898-2034 or by email at Dee.Miles@BeasleyAllen.com, Archie.Grubb@BeasleyAllen.com, Andrew.Brashier@beasleyallen.com.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.