In mid-October, the United States Supreme Court heard oral arguments in Campbell-Ewald Co. v. Gomez, a case posing two important questions for class action defendants: (1) "Whether a case becomes moot, and thus beyond the judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim"; and (2) "Whether the answer to the first question is any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified."
In Campbell-Ewald, a plaintiff (Gomez) filed a class action under the Telephone Consumer Protection Act (TCPA), alleging that he and others had received unsolicited Navy recruiting text messages from a mobile marketing contractor. Before the class was certified, the marketing contractor offered Gomez over US$1500 per violation—three times more than the statutory damages that Gomez would receive if he prevailed—plus costs and a stipulation to an injunction.
From the transcript of oral argument, a number of Justices (Roberts, Scalia) appeared concerned as to whether the required "adversity" still exists between the parties after the plaintiff is offered complete relief. And we know from their dissent in an earlier case, Genesis HealthCare Corp. v. Symczyk, that four justices (Kagan, Sotomayor, Ginsberg, and Breyer) believe that an unaccepted settlement offer is not enough to moot a plaintiff's interest in the controversy. The outcome of this case may therefore depend on which way Justice Kennedy comes down. Alternatively, late in the argument, Justice Breyer suggested that if the defendant actually delivered a check to a court for complete payment of the claims, the court would then be free to enter a judgment for the named plaintiff "who has gotten everything that he asked for" and end the class action entirely. It seems at least possible that five justices might be willing to sign on to such an approach.