The Supreme Court heard a case last week that could have a significant impact on class action lawsuits. In Campbell-Ewald Company v. Gomez the court heard arguments about whether a full settlement offer to the named plaintiffs in the action causes it to become moot. According to the New York Times, the plaintiff in the case received a text from the U.S. Navy (through a third party contractor) which attempted to recruit him to join the military branch. He sued under the Telephone Consumer Protection Act, which allows recipients of unsolicited text messages to recover up to $1500 in damages, and sought to form a class of others similarly affected. The Times reported that the defendant, Campbell-Ewald Company, extended a settlement offer to Gomez, which included damages of $1503, plus court costs and a promise to cease sending the text messages. Gomez did not respond to the offer and continued with the case.
According to the Washington Post and SCOTUS Blog, the court appeared divided during arguments on Wednesday, with the more conservative justices seeming inclined to find that a full settlement offer made a class action moot and the more liberal justices leaning toward finding that it did not, as Gomez asserted. SCOTUS Blog analysis suggested that a particular concern for those who would side with Gomez is the idea that large companies could "pick off class representatives one after another," and limit the power of class actions generally.
Chief Justice Roberts expressed concerns about wasting the court's time, and said to Gomez's counsel at one point, “You’re being given everything you want,” and “You won’t take yes for an answer.” Justice Breyer engaged in a line of questioning that suggested a potential mechanism for compromise, which would involve defendants paying money into court instead of just offering settlement.
As is often the case, Justice Kennedy may serve as a swing vote in this matter.
Photo credit: Flickr user Joe Gratz.