Telephone Consumer Protection Act defendant Campbell-Ewald Company, after losing in the Supreme Court, continued its losing streak in the courts with a district court judge refusing to find the case moot despite the defendant’s repeated attempts to pay the plaintiff.
The litigation involves Campbell-Ewald, an advertising agency, that allegedly sent unwanted text messages on behalf of the U.S. Navy to various recipients, including Jose Gomez. After Gomez filed his putative class action claim alleging violations of the TCPA, the defendant made an offer pursuant to Rule 68 of the Federal Rules of Civil Procedure, and a separate offer to pay Gomez $10,000—more than enough to cover even trebled damages under the statute.
Gomez rejected the offer and Campbell-Ewald moved to dismiss, arguing that its offer had rendered the case moot. A federal district court denied the motion and the Ninth Circuit Court of Appeals agreed. The U.S. Supreme Court granted certiorari due to a split in the circuits on the issue and sided with the plaintiff.
The Justices ruled in a 6-2 opinion that an unaccepted offer is a nullity. “[A]n unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case, so the District Court retained jurisdiction,” Justice Ruth Bader Ginsburg wrote, adding that a class representative with a live claim “must be accorded a fair opportunity to show that certification is warranted.”
On remand, Campbell-Ewald pursued a pair of motions: one for leave to deposit funds with the court and a second to dismiss for lack of jurisdiction, since the defendant not only sent Gomez’s counsel a certified check, but also separately asked the court to accept a payment in the same amount.
U.S. District Court Judge Dolly M. Gee denied both motions.
For support, the court turned to a Ninth Circuit decision, Chen v. Allstate Ins. Co., decided since the Supreme Court’s ruling in Campbell-Ewald. In that case, a three-judge panel held that even where injunctive relief had been offered and funds deposited in an escrow account, the case was not moot because “relief has been offered, but it has not been received.”
“Chen makes explicit that funds deposited in an escrow account have not been ‘actually received’ for purposes of mooting an individual plaintiff’s claims,” Judge Gee said. “Nothing in the Supreme Court’s Campbell-Ewald opinion precludes this holding.”
The court was not persuaded by the defendant’s argument that a petition for rehearing en banc remains pending in theChen dispute or that the check it sent to Gomez’s counsel was neither rejected nor returned.
Campbell-Ewald may not “force Gomez to accept a settlement which has not been negotiated for or accepted merely by sending his counsel an unsolicited check and deeming it ‘unconditional’ and ‘irrevocable,’ ” the court wrote. Even assuming, arguendo, that a district court could enter a judgment that provides complete relief on a plaintiff’s individual claims over plaintiff’s objections, and thereby moots those claims, the class claims remained viable.
Seizing on the “fair opportunity” language in the Supreme Court’s decision, the court said the matter remains “live” because the plaintiff has not accepted the settlement offer and the court has yet to enter judgment in his favor. “Gomez has not yet had a fair opportunity to show whether or not class certification is warranted, and it would not be appropriate under the circumstances for the court to enter judgment for Plaintiff against his wishes,” Judge Gee concluded.
To read the order in Gomez v. Campbell-Ewald Co., click here.
Why it matters: The order is a blow to TCPA defendants still clinging to hope after the Supreme Court’s Campbell-Ewald decision earlier this year. The Justices’ comment that a class representative with a live claim “must be accorded a fair opportunity to show that certification is warranted” was given full effect by the Ninth Circuit in the Chen decision as well as by Judge Gee in her latest ruling in the Gomez dispute. At least in the Ninth Circuit, it appears that defendants face a nearly insurmountable obstacle—a showing that plaintiffs were provided with a “fair opportunity” to demonstrate the requirements for certification—before they can moot a putative class action plaintiff’s individual claim.