On January 20, 2016, the Supreme Court of the United States ruled in favor of a consumer on the question of whether an offer of judgment for complete relief to the named plaintiff in an uncertified class action lawsuit was enough to render the claims moot. In a 6-3 split decision the Court held in the case Campbell-Ewald Co. v. Gomez, No. 14-857, 2016 WL 228345, ---S.Ct. --- (U.S., Jan 20, 2016) that an unaccepted settlement offer or offer of judgment fulfilling the plaintiff’s requested relief does not moot the case when relief is sought on behalf of others similarly situated. The Court’s majority based their decision on the basic principles of contract law reasoning that without the plaintiff’s acceptance of the offer, the proposal bound neither party to the settlement. It is then reasoned, absent the plaintiff’s acceptance, the plaintiff had not forfeited the right to litigate the case. Chief Justice Roberts, joined by Justices Scalia and Alito, dissented from the majority criticizing their reliance on contract law to resolve the central issue in the case; whether or not there was still a controversy under Article III.
“The question, however, is not whether there is a contract; it is whether there is a case or controversy under Article III. If the defendant is willing to give the plaintiff everything he asks for, there is no case or controversy to adjudicate, and the lawsuit is moot.”
The ramifications for class action lawsuits filed under consumer protection laws such as the Fair Credit Reporting Act, the Telephone Consumer Protection Act and the Fair Debt Collection Practices Act are significant as plaintiffs typically seek damages under the specific statute, not actual damages. Due to this ruling, a plaintiff’s maximum recovery can be calculated whereas, previously, a defendant could provide a Rule 68 offer of judgment in the statutory amount, along with acquired attorneys’ fees, to moot the case as plaintiff had been afforded complete relief.
Importantly, however, as Justice Roberts commented in his dissent, Rule 68 may not have been completely eliminated as a class action defense tool:
“The majority holds than an offer of complete relief is insufficient to moot a case. The majority does not say that payment of complete relief leads to the same result… the majority’s analysis may have come out differently if Campbell had deposited the offered funds with the District Court.”
For more information about Campbell-Ewald Co. v. Gomez or the defense of class action lawsuits and claim brought under the consumer protection laws please contact Joseph Messer at 312-334-3440 or firstname.lastname@example.org.