“Welcome to the great new world of TCPA litigation – where a plaintiff turns up his nose at $10,000 in cash to compensate him for his receipt of a single targeted text message recruiting for the United States Navy, and where our courts stretch the limits of Article III to preserve his crusade for a would-be class of others similarly situated.”-Seamus Duffy
It’s becoming a strange, strange world when it comes to making offers of complete relief to named plaintiffs in class actions. Continue reading
In the wake of the Supreme Court’s decision in Campbell-Ewald v. Gomez, the Ninth Circuit has held that an offer tendering complete relief, conditioned on the dismissal of a putative class action, is insufficient to moot the action for purposes of Article III jurisdiction.
In Chen v. Allstate, No. 13-16816 (9th Cir. April 12, 2016), the defendant deposited in escrow an amount exceeding the value of the plaintiff’s individual TCPA claim. The escrow instructions conditioned the payment of the funds on the entry of an order from the district court dismissing the action as moot. The defendant asked the Ninth Circuit to supplement the record on its pending appeal, to hold that the tender had mooted the plaintiff’s claims under Article III, and to direct the district court to dismiss the action. Continue reading
On January 20, 2016, the Supreme Court issued a long-awaited ruling in Campbell-Ewald Co. v. Gomez. Although their reasoning differed, six of the Justices held that an unaccepted offer of complete relief does not in and of itself deprive a court of Article III jurisdiction by mooting a plaintiff’s claim.
The Majority Opinion
The majority opinion written by Justice Ginsburg adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare Corp. v. Symczyk. The majority reasoned that, under the language of Rule 68(b) and “basic principles of contract law,” an unaccepted offer of judgment, like an unaccepted offer to contract, is a legal nullity that “creates no lasting right or obligation” and has “no continuing efficacy.” The fact that the offer was unaccepted was critical to the majority’s reasoning because it meant that the plaintiff’s claim “stood wholly unsatisfied.” Indeed, the majority noted several times throughout its opinion that the plaintiff “gained no entitlement to the relief” previously offered and had not received the relief previously sought, and thus retained a personal stake in the outcome of the litigation. See Campbell-Ewald v. Gomez, No. 14-857, slip op. at 8-12 (Jan. 20, 2016).
A number of federal district courts have recently stayed TCPA cases pending the outcome of Supreme Court proceedings in Robins v. Spokeo, Inc. and Campbell-Ewald Co. v. Gomez, and the outcome of petitions seeking review of the FCC’s July 10, 2015 Declaratory Ruling and Order (“FCC Order”) that are currently pending before the United States Court of Appeals for the District of Columbia Circuit. See ACA Int’l, et al. v. F.C.C., No. 15-1211 (D.C. Cir. 2015).
Last week the Supreme Court heard oral argument in Campbell-Ewald Company v. Gomez, a TCPA case that concerns (among other things) whether the claims of the named plaintiff in a putative class action will be mooted by an unaccepted offer of complete relief. For those who were unable to attend the spirited oral argument, audio and a transcript are available here.
In an August 6, 2015 opinion, the Seventh Circuit ruled that a defendant’s offer of complete relief in a TCPA lawsuit did not render an individual plaintiff’s claims moot. Chapman v. First Index, Inc., Nos. 14-2773, 14-2775, 2015 WL 4652878 (7th Cir. Aug. 6, 2015). In Chapman, the Seventh Circuit expressly “overrule[d]” its prior decisions in Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011), Thorogood v. Sears, Roebuck & Co., 595 F.3d 750 (7th Cir. 2010), and Rand v. Monsanto Co., 926 F.2d 596 (7th Cir. 1990), “to the extent they [held] that a defendant’s offer of full compensation moots the litigation or otherwise ends the Article III case or controversy.”
As we noted a few months ago, several pending Circuit appeals and a pending petition for certiorari to the United States Supreme Court foreshadowed that clarity might be coming to the question whether an offer of complete relief to a named plaintiff in a putative class action can moot the named plaintiff’s claim, and the related issue of whether named plaintiffs can continue to pursue claims on behalf of a putative class after their individual claims become moot. Last week the Second Circuit has provided a partial answer, and today the Supreme Court granted certiorari, which hopefully will put the issue to rest once and for all.
In Compressor Eng’g Corp. v. Thomas, Case No. 10-10059, 2015 U.S. Dist. LEXIS 20079 (E.D. Mich. Feb. 19, 2015), Defendant Charles Thomas Jr. sought to moot the claim of Plaintiff Compressor Engineering Corporation (“Compressor”) by making an offer of judgment for $1,500, the maximum statutory award for a single violation of the TCPA.
Compressor filed suit after receiving an allegedly unsolicited fax and sought to certify a class of “[a]ll persons that are holders of telephone numbers to which a facsimile transmission was sent on behalf of Defendant advertising the goods or services of Defendant at any time from August 13, 2005 to present….” Id. at 4. In addition to seeking monetary damages, Compressor also sought injunctive relief.
The new year is off to a busy start, and it appears 2015 will bring additional Circuit-level clarity to an issue the Supreme Court left open in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013): whether an offer of complete relief to a named plaintiff in a putative class action moots the named plaintiff’s claim. The resolution of that issue, and the related question whether named plaintiffs can continue to pursue claims on behalf of a putative class after their individual claims become moot, will have a major impact on class action litigation, particularly in cases that seek statutory damages such as those available under the TCPA.
In Mey v. Frontier Communs. Corp., No. 3:13-1191-MPS, 2014 U.S. Dist. LEXIS 161675 (D. Conn. Nov. 18, 2014), Plaintiff Diana Mey alleged that she received two calls to her cell phone from Frontier’s automatic telephone dialing system. Id. at *2-3. Mey filed a complaint against Frontier and simultaneously moved for class certification. Id. at *4-5. Two months later, Frontier wrote to Mey and offered to settle her claims with a payment of $6,400 plus taxable costs and entry of prospective injunctive relief. Mey declined. Id. Frontier then moved to dismiss, arguing that the court lacked subject matter jurisdiction because Frontier’s offer had “mooted Ms. Mey’s individual claim and all potential class claims.” Id.