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Supreme Court Ends The Practice Of “Picking Off” Class-Action Plaintiffs

Justice Ginsburg suggests, but does not approve, a new strategy

In Campbell-Ewald Company v. Gomez (decided by the United States Supreme Court on January 20, 2016), the Supreme Court decided that a class-action lawsuit cannot be eliminated by making an offer of full relief to the lead plaintiff. The ruling ends a difference of opinion among courts around the nation and constitutes the final word on the practice known as “picking off.”

The dispute arose when Jose Gomez filed a class-action suit after receiving a text message recruiting him to join the Navy. Campbell, the independent contractor that sent the message on behalf of the Navy, proposed to settle Gomez’s individual claim by filing an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Campbell offered to pay Gomez his costs, excluding attorney’s fees, and $1,500 per message, thereby satisfying his maximum individual recovery. Gomez did not accept the settlement offer and allowed the  Rule 68 offer to lapse.

As a result of Gomez’s refusal, Campbell moved to dismiss the case. No case or controversy remained, Campbell urged, because the offer mooted Gomez’s individual claim by providing him with complete relief. Gomez had not moved for class certification before his claim became moot, so Campbell argued the putative class claims also became moot.

The Supreme Court disagreed with Campbell.  Justice Ruth Bader Ginsburg delivered the opinion, writing, “We hold today […] that an unaccepted [Rule 68] settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.”

Although this ruling abolished one weapon to end a class action, it did leave the door open slightly to a different strategy that will no doubt be the subject of future TCPA appeals: “In sum, an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case […] That ruling suffices to decide this case. We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.”

Takeaway: There is now one less option for defendants trying to eliminate a class-action lawsuit. This ruling makes the prevention of such suits even more important.  

 

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