A case before the U. S. Supreme Court may be the death knell of federal class action suits in America. The irony is that the lethal weapon may be a defendant’s offer of settlement.
A very simple explanation of a federal class action is:
– Someone allegedly suffers an “injury”;
– His/her injury is also allegedly suffered by other people, perhaps thousands of other people;
– He/she brings a federal action alleging his/her injury and the injury of all those other people;
– The initial plaintiff and all the other members comprise a “class” of people who were injured: he/she is the class representative (or lead plaintiff) and they are all class members;
– The class must be certified near the beginning of the suit and that certification process can be time-consuming and expensive;
– The class representative has to bear up under the certification process. If he/she quits before the class is certified, somebody else has to step in as a viable “class representative” or the class action is dead in the water;
– A YouTube video explanation of a basic federal class action can be accessed here: https://www.youtube.com/watch?v=N5Qafh-eAM4
In the instant case, a man named José Gómez received an unsolicited text message from Campbell-Ewald Company, a contractor for the U. S. Navy. Campbell-Ewald Company sends text messages en masse seeking recruits for the U. S. Navy. Gomez, a 40-year-old unlikely Naval recruit who never opted in for those messages, sued and sought the formation of a class action for “other unconsenting recipients of the Navy’s recruiting text messages,” plus damages under the federal Telephone Consumer Protection Act.
Before the class could be certified, Defendant offered Gomez $1,503.00, which is three times as much as federal law authorizes for a violation of the Telephone Consumer Protection Act. Gomez let the offer expire, which constitutes a rejection of the offer.
Are you still with me? Good, because here comes the interesting part. The Defendant then argued that Gomez’s case should be dismissed as “moot” because Gomez rejected the offer. Defendant argued it offered the Plaintiff even more than the damages to which he was entitled, so there was nothing left for the Court to decide. If the court ruled in the Defendant’s favor, it would kill Gomez’s suit before the class could be formed.
Using that logic, a Defendant who wants to kill a class action merely needs to offer damages to the class representative before the class is formed, whether or not the class representative accepts the offer. Boom: no class action.
The California federal appeals court rejected Defendant’s argument but they have taken it to the U. S. Supreme Court. Arguments were heard in mid-October 2015 and the SCOTUS has yet to issue a decision. If the Court sides with the Defendant in this case, it will deal a devastating blow to class actions in the U. S. The SCOTUS blog showing the case’s facts and progression can be accessed here: http://www.scotusblog.com/case-files/cases/campbell-ewald-company-v-gomez/
Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.