Supreme Court Nixes Defendants' Attempts To Get Rid Of Class Actions By Making 'Pickoff' Offers To Settle Named Plaintiffs' Individual Claims

Editor's Note: Originally published by the Columbus Chamber of Commerce, this article appeared on their website March 10 2016. It is republished to BakerHostetler's Class Action Lawsuit Defense blog with their permission.

The Supreme Court recently held that a defendant cannot get rid of a class action by merely offering to settle with the named plaintiff on his or her individual claims. In the past, class action defendants have sometimes attempted to dispose of the entire class action in this manner by making "pickoff" offers that give the named plaintiff everything he or she asked for on an individual basis, before the court approves the lawsuit to go forward as a class action. But in a recent decision, the Supreme Court held that such "pickoff" offers do not moot the class claims. Campbell-Ewald Co. v. Gomez, ___ U.S. ___, 136 S.Ct. 663 (2015). The Court, however, expressly left open the question of whether actual payment in full for the named plaintiff's individual claims (as opposed to just an offer) could moot the case.

The plaintiff in Campbell-Ewald brought individual claims under the Telephone Consumer Protection Act (TCPA) for text messages that he said he received without his consent. The plaintiff also sought to represent a nationwide class of individuals who had received similar unconsented-to text messages. Before the plaintiff's deadline to request the court's approval for the lawsuit to proceed as a class action, the defendant made a settlement offer for the full amount of monetary damages individually claimed by the plaintiff. The plaintiff did not accept the settlement offer.

The question before the Supreme Court was whether the defendant's unaccepted settlement offer for the full amount of the named plaintiff's claim mooted the plaintiff's individual lawsuitand, consequently, the proposed class action lawsuit. In an earlier case, Genesis HealthCare Corp. v. Symczyk, 569 U.S. ___ (2013), the Court suggested, without actually deciding the issue, that an unaccepted settlement offer for the full amount demanded by the plaintiff may render a plaintiff's claim moot. When presented directly with the question, however, the Court in Campbell-Ewald concluded: "When a...