In a move that may greatly impact litigation under the Telephone Consumer Privacy Act (TCPA) and potentially other acts that provide statutory damages for violations, the high court will hear arguments in a case questioning whether a class action can survive even after the named plaintiff(s) received an offer of complete relief
On May 18, 2015, the United States Supreme Court granted certiorari in Campbell-Ewald v. Gomez, a putative class action where the plaintiff alleged that Campbell-Ewald violated the TCPA by sending him unsolicited text messages promoting the U.S. Navy. The Ninth Circuit Court of Appeals had previously ruled that Campbell-Ewald did not enjoy derivative sovereign immunity from the plaintiff’s suit despite the fact that it contracted with and performed services for the U.S. Navy, and that the plaintiff’s refusal to accept an offer that would have given him complete relief was by itself insufficient to moot the claim. The circuits are split in the TCPA context as to whether an offer of full judgment to the named plaintiff in a class action moots the case, which is a frequently contested issue in TCPA litigation. TCPA litigation has seen an explosion of class actions in recent years, with class settlements in many cases reaching tens of millions of dollars.
Campbell-Ewald’s petition for certiorari asked the Supreme Court to resolve three questions: First, it asked the Supreme Court whether a case becomes moot when the plaintiff is offered complete relief on his or her claim. Second, it asked whether the Court’s answer to the first question differs if a plaintiff asserts a class claim but received an offer of complete relief before class certification. Finally, the petitioner asks whether derivative sovereign immunity for government contractors is limited to claims arising out of property damage caused by public works projects.
Among many potential outcomes, the Court’s resolution of the first and second questions presented could broadly affect future litigation under a host of statutory regimes that provide plaintiffs with statutory damage awards for violations, such as the TCPA. Should the Supreme Court agree with Campbell-Ewald’s position and reverse the Ninth Circuit, future defendants could potentially short circuit similar putative class actions by offering to make the named plaintiff whole. Such an outcome could make TCPA class actions substantially less attractive to the plaintiff’s class action bar, which would be a great relief to companies and others who use autodialing and/or prerecorded call technology to reach consumers.