On Wednesday, the Supreme Court’s ruling in Campbell-Ewald Company v. Gomez placed serious limits on a strategy some companies have employed to dispose of class cases quickly. The Court held that a company cannot moot a purported class claim by offering a settlement to the named plaintiff, even if the class has not yet been certified, when the plaintiff rejects the offer. The Campbell-Ewald decision reaffirmed the basic principle that a case is not moot as long as a “case or controversy” exists for the court to decide, following reasoning Justice Kagan offered in her Genesis Healthcare dissent.
In this particular case, Jose Gomez sued Campbell-Ewald (a Navy contractor) under the Telephone Consumer Protection Act (TCPA) for sending him unsolicited text messages to join the Navy. Gomez brought the suit for himself and others, for treble damages and injunctive relief. The TCPA imposes statutory damages for violations—the greater of actual monetary loss or $500 for each violation, with treble damages applicable for a willful or knowing violation of the statute. Campbell-Ewald offered what it characterized as full relief to Gomez in the form of a Rule 68 offer of judgment, with no admission of liability. Of significance, Campbell-Ewald’s offer was the maximum, trebled amount of damages under the statute for each text message Gomez could show he received, plus costs excluding attorneys’ fees. The Court’s 6-3 majority, finding basic contract principles persuasive, determined that a rejected offer remained only a proposal that was not binding on the parties. The court also decided that the government contractor hired to recruit for the Navy was not “immune” from suit under a derivative sovereign immunity theory. The decision continues a long line of tough TCPA interpretation for the defense bar, though the dissenting justices suggested that other pick-off strategies may still exist.
Learn more about Campbell-Ewald and the other major class action developments of the past year by tuning in to next Tuesday’s webinar, “Class Action Litigation – A Look Back at 2015.” Register now to join us!
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