An unaccepted settlement offer or offer of judgment does not moot a plaintiff's case, the U.S. Supreme Court ruled this week in Campbell-Ewald Co. v. Gomez. In the case, Jose Gomez filed a nationwide class-action on behalf of individuals who had received, but had not consented to receipt of, unsolicited Navy recruiting text messages in violation of the Telephone Consumer Protection Act (TCPA or Act).
Prior to the deadline for filing a motion for class certification, Campbell-Ewald proposed to settle the individual claims and filed an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Campbell-Ewald offered to pay Gomez’s costs, excluding attorney's fees, and $1,503 per message that Gomez could show he had received, thereby satisfying his personal treble-damages claim. Campbell-Ewald also proposed a stipulated injunction in which it agreed to be barred from sending text messages in violation of the TCPA. The proposed injunction, however, denied liability and the allegations made in the complaint, and disclaimed the existence of grounds for the imposition of an injunction. The settlement offer did not include attorney fees because the TCPA does not provide for them to be awarded. Gomez did not accept the settlement offer and allowed Campbell-Ewald's Rule 68 submission to lapse. Campbell-Ewald argued that the case should have been dismissed because its offer mooted Gomez’s individual claim.
The U.S. Supreme Court ruled that the complaint was not rendered moot by the unaccepted offer to satisfy the individual claim. It held that once Gomez rejected the offer of judgment, it had no continuing effect. Applying principles of contract law, the Court found that absent acceptance, the offer remained only a proposal that was not binding on any party. Thus, there remained a live case or controversy. The Court explained, however, that it was not deciding whether the result would be different if a defendant actually deposits the full amount of the individual claim into an account payable to the plaintiff.
What Does This Case Mean For Employers and Defendants?
Gomez limits the ability of employers and dependents to moot a class action by relying on an unaccepted offer of judgment. However, because the Court did not address the situation when the employer actually delivered the full amount of an individual claim to the plaintiff, this might provide an avenue for attacking putative class action lawsuits. Employers and defendants should consider this and other proactive measures to address class action allegations.