Supreme Court rules against company seeking to end class action with settlement offer
A 6-3 U.S. Supreme Court decision on Wednesday is a defeat for companies seeking to fend off class actions with a full settlement offer to the name plaintiff.
Justice Ruth Bader Ginsburg wrote the majority opinion (PDF) for Campbell-Ewald Co. v. Gomez in favor of Jose Gomez, who sued after receiving an unsolicited text on behalf of the Navy. He alleged a violation of the Telephone Consumer Protection Act, which allows trebled damages of up to $1,500 for those who receive unwanted texts.
The original defendant, an advertising agency hired by the Navy, offered to settle for $1,503 and costs for each unsolicited text. Its offer proposed relief for Gomez alone, did not include attorney fees, and did not include an admission of liability, Ginsburg said. Gomez refused the offer. The agency, Campbell-Ewald Company, then petitioned the court to dismiss Gomez’s suit against them.
“Under basic principles of contract law,” Ginsburg wrote, the settlement offer and offer of judgment “had no continuing efficacy.” In addition, Rule 68 of the Federal Rules of Civil Procedure, under which the offer of judgment was made, “hardly supports the argument than an unaccepted settlement offer can moot a complaint,” Ginsburg said.
Turning to a second issue, Ginsburg found that that Campbell-Ewald was not shielded by derivative sovereign immunity.
Ginsburg’s opinion was joined by Justices Anthony M. Kennedy, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan. In a concurrence, Justice Clarence Thomas agreed with the result but said he would have decided the case based on the common-law history of tenders.
Chief Justice John G. Roberts Jr. wrote a dissent that was joined by Justices Antonin Scalia and Samuel A. Alito Jr. Roberts said Campbell-Ewald had offered to pay Gomez the full amount authorized by the law. “The federal courts exist to resolve real disputes, not to rule on a plaintiff’s entitlement to relief already there for the taking,” Roberts wrote.
Alito also wrote a separate dissent saying he agrees that a full settlement offer can moot a case, as long as there is no dispute the defendant will make good on the promise to pay.
Related articles:
ABAJournal.com: “Supreme Court considers case of litigant who ‘won’t take yes for an answer’”
ABAJournal.com: “Does full settlement offer moot plaintiff’s claim? Supreme Court to decide in texting case”
