IN THE NEWS: Supreme Court Rules Class Actions Not Mooted by Offer of Settlement to Lead Plaintiff
January 20, 2016 - Campbell-Ewald Co. was hired by the U.S. Navy to help with a recruiting campaign. Campbell, in turn, hired a third party to send text messages to over 100,000 recipients who had allegedly consented to receiving such solicitations. Jose Gomez filed a nationwide class action in California federal district court claiming Campbell violated the Telephone Consumer Protection Act (TCPA) when it sent him the text message without consent and sought treble damages, costs, attorney’s fees and injunctive relief. Campbell made an offer of judgment to Gomez under Federal Rule 68 that included treble damages and injunctive relief but it denied liability and failed to offer attorney’s fees not available under the TCPA. Gomez rejected the offer. In a strategic move that has become common in class action defense, Campbell then moved for dismissal arguing that no Article III case or controversy remained because its offer mooted Gomez’s individual claim by providing him with complete relief. The district court denied the motion and the Ninth Circuit agreed finding that an unaccepted offer of judgment cannot moot a class action. The Supreme Court affirmed in a holding that has trimmed the arsenal of class action defense, that Campbell’s unaccepted offer did nothing to alter the course of his claim and had no force and affect.