Campbell-Ewald Co. v. Gomez (2016)

The short version

A defendant cannot moot a Telephone Consumer Protection Act (TCPA) suit, including a proposed class action, just by offering a named plaintiff full relief. The Supreme Court held that an unaccepted settlement offer or offer of judgment does not make the plaintiff's case moot. The Court also held that a government contractor that allegedly violated federal law and the government's explicit instructions is not protected by "derivative sovereign immunity."

Background

The U.S. Navy hired Campbell-Ewald Company to run a recruiting campaign involving text messages to young people who had opted in to receiving marketing messages. A subcontractor sent the Navy's message to more than 100,000 recipients. Jose Gomez, who was 40 years old and said he had not consented, received one of the texts. He filed a nationwide class action alleging a violation of 47 U.S.C. § 227(b)(1)(A)(iii).

Before Gomez moved for class certification, Campbell-Ewald offered to settle his individual claim and served an offer of judgment under Federal Rule of Civil Procedure 68 on Gomez. Gomez let the offer lapse. Campbell-Ewald argued that its offer of complete relief made Gomez's individual claim moot and that the class claims were moot with it.

What the Court decided

The Court affirmed the Ninth Circuit. Justice Ginsburg's opinion of the Court was joined by Justices Kennedy, Breyer, Sotomayor and Kagan. Justice Thomas concurred in the judgment. Chief Justice Roberts and Justice Alito filed dissents.

• Mootness. "An unaccepted settlement offer or offer of judgment does not moot a plaintiff's case." As with any unaccepted contract offer, it creates no lasting right or obligation, hence the dispute between the parties persists.
• Open question. The Court said it was not deciding what happens if a defendant actually deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff and the court enters judgment for the plaintiff in that amount.
• Immunity. Campbell-Ewald's status as a federal contractor did not give it the government's immunity from suit when it allegedly violated both federal law and the government's explicit instructions.

Why it matters

• "Picking off" named plaintiffs got harder. Defendants could no longer simply end a putative TCPA class action by making an offer to the named plaintiff before class certification.
• Contractors are not automatically immune. Companies that send calls or texts for a government client can still be liable under the TCPA when they allegedly act outside the client's instructions.