Posted on Blog May 18, 2016
In a recent 5-4 decision, the Supreme Court in Campbell-Ewald v. Gomez found that offering a settlement to the lead plaintiff in a class action does not make the case moot. In this case, Campbell-Ewald Company was hired by the U.S. Navy as a marketing consultant. As part of its consulting, Campbell-Ewald developed a marketing plan that included sending unsolicited text message advertisements in violation of the Telephone Consumer Protection Act. As a result, a class action lawsuit was brought against Campbell-Ewald.
In an attempt to escape the potential windfall of a verdict against it, Campbell-Ewald made a settlement offer to the lead plaintiff, Jose Gomez which offered complete relief to him. When Mr. Gomez rejected the settlement, Campbell-Ewald moved to dismiss the case as moot since Mr. Gomez would have received the same relief as the court could have awarded. In its decision, the Supreme Court held that an unaccepted offer has no force and does not affect whether a case presents an actual controversy. Accordingly, not accepting a settlement offer, even if for the full amount of the relief requested, does not make a case moot.
This case may prove to be a big win for plaintiff class action attorneys because it will allow them to retain the leverage gained from bundling hundreds or even thousands of claims together without the fear that the case may be dismissed if one person—the lead plaintiff—is offered full relief.