Yesterday, the Supreme Court issued a decision in which it held that an unaccepted Rule 68 offer of judgment made to the named plaintiff in a putative class action does not moot the case. In doing so, the Court seemingly put an end to what was a contentious class action issue—an issue that this blog has followed closely. Interestingly, however, the Court chose not to decide whether a Rule 68 offer could moot a case if accompanied by a payment in the amount of that offer.
The facts that brought Campbell-Ewald Co. v. Gomez to the Supreme Court were similar to the other recent class action cases involving this Rule 68 issue. Gomez—on behalf of himself and a putative class—alleged that he received unauthorized text messages from one of Campbell’s subcontractors as part of a mass-marketing campaign on behalf of the U.S. Navy. He claimed these unauthorized messages violated the Telephone Consumer Protection Act (“TCPA”).
Prior to Gomez filing for certification, Campbell tendered a Rule 68 offer of judgment for the amount of Gomez’s statutory damages, court costs incurred, and an injunction forbidding future unauthorized messages. The offer lapsed without Gomez’s acceptance, and Campbell sought summary judgment on the grounds that its “offer of complete relief” mooted Gomez’s claims and deprived the court of jurisdiction. Both the district court and the Ninth Circuit disagreed.
Writing for the majority, Justice Ginsberg first noted that recent Supreme Court precedent had assumed, without deciding, that an unaccepted Rule 68 offer of complete relief could moot a plaintiff’s claim. Despite this precedent, the Court relied on basic contract law to hold that an unaccepted Rule 68 offer of judgmentcannot be used to moot a plaintiff’s claim. The Court reasoned that, “[a]s every first-year law student learns, the recipient’s rejection on an offer ‘leaves the matter as if no offer had ever been made.’” Thus, the Court concluded, once Gomez allowed Campbell’s offer to lapse, it was deemed rejected and did not bind either party. That is, the parties remained adverse, and the case was not moot.
Without a doubt, the Court’s holding severely curtails a defendant’s ability to prevent class certification by making Rule 68 offers of judgment to individual plaintiffs. However, the Court’s decision does not render Rule 68 completely useless in this context. First, the sanction set forth in Rule 68 still threatens plaintiffs with the potential of paying the defense’s costs if any judgment obtained is less favorable than an unaccepted Rule 68 offer. Second, the Court explicitly reserved for another day the question of whether a defendant’s actual payment of a Rule 68 offer (for instance, by depositing the offered sum in an account payable to the plaintiff) could moot a plaintiff’s claims under Rule 68.
Thus, while the Court’s decision in Gomez clearly impacts the practice of using Rule 68 offers to fight putative class actions, it does not eliminate it completely. To the contrary, the Court seems to have invited future attempts to foreclose class actions through the use of new—and creative—methods under Rule 68.