In Campbell-Ewald Company v. Gomez, 136 S. Ct. 663 (2016), the Supreme Court addressed the question of whether the failure of the named Plaintiff in a putative class action to accept a Rule 68 offer of judgment satisfying all of his alleged damages serves to moot the putative class litigation. In a 6-3 split, the majority of the court held that an unaccepted offer of judgment could not moot either the named Plaintiff’s or the putative class’s claims.
Campbell was contracted by the U.S. Navy to assist in its recruiting efforts. Among the services it provided to the Navy, Campbell executed a text message recruiting campaign in which recruiting messages were sent to the cellphones of over 100,000 individuals. The messages were intended only to be sent to people who had previously opted into receiving recruiting information via text from the Navy. Plaintiff, Jose Gomez claimed he received messages from the recruiting campaign without his prior consent. Mr. Gomez filed suit under the Telephone Consumer Protection Act against Campbell on behalf of himself and a putative class of persons who received the messages without their consent. Prior to Mr. Gomez filing a class certification motion, Campbell made an offer of judgment pursuant to FRCP Rule 68, offering to pay statutory and trebled damages of $1,503 for each text message Mr. Gomez received from the recruiting campaign. Mr. Gomez did not accept the offer and it lapsed after 14 days. Campbell then filed a Motion to Dismiss the entire case for lack of subject matter jurisdiction, arguing that its offer to Mr. Gomez represented the most he could be entitled to receive for his claims and the offer therefore there was no longer a justiciable controversy because the defendant had offered to satisfy all of the named Plaintiff’s claims. The trial court denied Campbell’s Motion to Dismiss, but later granted summary judgment on other grounds. On appeal, the Ninth Circuit, upheld the trial court’s ruling that the unaccepted offer of judgment mooted neither Mr. Gomez’s claims, nor the class’s.
The Supreme Court granted Campbell’s Petition for Certiorari and heard oral arguments. Writing for the majority, Justice Ginsberg decided the issue on the principles of basic contract law. An offer without acceptance, she reasoned, is “a legal nullity, with no operative effect.” For that reason, Campbell’s unaccepted offer of judgment had no effect on Mr. Gomez’s or the absent class members’ stake in the litigation.
The Campbell decision will be a setback for class action defendants seeking to use the Rule 68 offer of judgment to pick off the named class representatives and moot the class claims. As Chief Justice Roberts’s dissent notes, though, the majority’s decision leaves open the possibility of mooting a claim by tendering an offer of judgment and depositing funds sufficient to satisfy the named representative’s claims into the registry of the trial court. We’ll have to wait a few more years for a decision on that issue, however.
Author: Tripp Dubose