U.S. Supreme Court Rejects Effort to Moot Putative Class Action

June 1 2016 | Committees

A defendant in a putative class action is not entitled to the dismissal of the complaint upon submitting an offer of judgment to the named plaintiff that would, if accepted, grant the plaintiff all he was entitled to. Campbell-Ewald Co. v. Gomez, No. 14-857 (U.S. Jan. 20, 2016).

At issue was a claim under the Telephone Consumer Protection Act, a law that prohibits “using any automatic dialing system” to send a text message to a cellular phone without the recipient’s prior express consent. The defendant allegedly sent an unwanted text message to Jose Gomez, who responded with a nationwide class-action complaint seeking statutory damages, treble damages for a willful and knowing violation of the act, and an injunction against the defendant’s further sending unsolicited messages. In response, the defendant presented Gomez with a Rule 68 offer of judgment, proposing to settle the case in exchange for the maximum statutory damages, costs, and a stipulated injunction in which it agreed not to send any text messages in violation of the act. The defendant continued to deny liability, however. Gomez did not accept the offer and let it lapse. The defendant, nevertheless, moved to dismiss the case for lack of subject-matter jurisdiction. According to the defendant, no case or controversy remained, because its offer mooted Gomez’s individual claim by providing him with complete relief. Because the offer of judgment preceded any motion for class certification, the defendant argued, the putative class claims were also moot.

Resolving a split in the circuits, the Supreme Court ruled that an unaccepted offer could not moot a putative class action.  Interestingly, the Court declined to speculate as to whether the result would have been different if (1) the defendant had deposited the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and (2) the district court thereafter entered judgment for the plaintiff in that amount. Because the case was remanded to the district court, one expects the defendant to pursue this possible opening.

Written by: Thomas Flanagan, Co-Chair of the Class Actions/Complex Litigation Committee 





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