Supreme Court Issues Ruling Favorable to Class-Action Plaintiffs

supreme-court
In a ruling favorable to class-action plaintiffs, the Supreme Court voted 6-to-3 that courts may not dismiss lawsuits simply because a defendant has offered to give the lead plaintiff everything the plaintiff sought.

A contrary decision would have allowed companies accused of minor but mass wrongdoing to deal with plaintiffs one by one, frustrating their ability to band together to sue over their claims, the New York Times reports.

Justice Ruth Bader Ginsburg summarized the majority opinion saying that once an offer is “unaccepted,” it is off the table. Chief Justice John Roberts, in dissent, said this approach gives plaintiffs too much power. “If the defendant is willing to give the plaintiff everything he asks for, there is no case or controversy to adjudicate, and the lawsuit is moot,” Roberts wrote, according to the Times.

The case, Campbell-Ewald Co. v. Gomez, centered on a text message sent to Jose Gomez in 2006 on behalf of the Navy. The message offered Gomez a chance for a career, an education, and “a chance to serve a greater cause.” But Gomez, 40, was over the age range for Navy recruits. Gomez sued under the Telephone Consumer Protection Act, which allows people who receive unwanted text messages to recover up to $1,500, the Times reports. He sought to represent a class of people who had received the message.

Campbell Ewald Company, a Navy contractor, offered to settle the case for $1,503 for each unsolicited text, court costs and a promise to stop sending such messages. Mr. Gomez did not respond to the offer. The company argued that the case should have been dismissed as moot because it had offered Gomez everything he had asked for. Justice Ginsburg said the company’s true aim was “to avoid a potential adverse decision, one that could expose it to damages a thousandfold larger than the bid Gomez declined to accept.”

Justices Anthony M. Kennedy, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined the majority opinion. Justice Clarence Thomas voted with the majority but did not adopt the rationale. Chief Justice Roberts’s dissent was joined by Justices Antonin Scalia and Samuel Alito. The three justices said the majority had run afoul of the constitutional requirement that federal courts may hear only live cases and controversies, according to the Times. The chief justice said there was no dispute for the federal courts to resolve because “relief [was] already there for the taking.”

The majority left the door open to procedures in which defendants did more than make an offer. “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,” Justice Ginsburg wrote.

Justice Alito suggested two procedures he would find acceptable. “The most straightforward way is simply to pay over the money,” Justice Alito wrote. “Alternatively, a defendant might deposit the money with the district court (or another trusted intermediary) on the condition that the money be released to the plaintiff when the court dismisses the case as moot.”

This decision is the first in three class-action cases the court has heard this term, the Times reports. The second concerns an attempt by thousands of workers at a Tyson pork processing plant to band together in a single lawsuit seeking overtime pay. The third case asks whether Congress may authorize lawsuits by plaintiffs who cannot prove they suffered a concrete injury.

 

This entry was posted in Class Action Lawsuits and tagged , , , . Bookmark the permalink.


© 2005-2017 Parker Waichman LLP ®. All Rights Reserved.