Supreme Court Short-Circuits Defense Strategy To Pick Off Class Rep

On January 20, the U.S. Supreme Court held in Campbell-Ewald Co. v. Gomez that an unaccepted Rule 68 offer of judgment does not render a plaintiff's action moot, no matter how good the terms of the offer. As a result, the defendant's strategy to defeat a class action by satisfying the individual claims of the putative class representative was rejected. The case plugs a hole left open by the Court's decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), in which a collective action under the Fair Labor Standards Act (FLSA) was declared moot after the lead plaintiff conceded in the district court that her individual claim had been mooted by an unaccepted offer of judgment.

Class action litigation allows an individual plaintiff to seek redress on behalf of itself as well as a group of similarly situated parties. However, until a motion to certify the class is filed pursuant to the procedure and standards laid out in Rule 23 of the Federal Rules of Civil Procedure, a federal court's jurisdiction over the matter under Article III of the Constitution depends on the existence of an actual controversy involving the named plaintiff. Rule 68 of the Federal Rules of Civil Procedure provides a mechanism by which a defendant may offer a judgment that grants some or all of the plaintiff's requested relief. In Campbell-Ewald, the Court addressed the issue of whether such an offer that would provide complete relief to the named plaintiff before class certification proceedings were instituted rendered his claim moot, thereby eliminating the necessary "case or controversy" required for the case to continue. Prior to Campbell-Ewald, the Circuit Courts of Appeals were split on this issue.

In Campbell-Ewald, Jose Gomez filed a nationwide class action alleging that Campbell, a marketing company hired by the Navy to conduct a recruiting campaign, violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited text messages. Before Gomez moved for class certification, Campbell offered Gomez $1,503 for each unsolicited text message he received, representing the maximum statutory damages he could recover under the TCPA. Campbell also agreed to pay Gomez's litigation costs (but not attorney fees) and to stipulate to an injunction preventing Campbell from sending further text messages in violation of the TCPA. Gomez allowed the offer of judgment to lapse without accepting it.

The five justices1 comprising the Campbell-Ewald majority held...