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By Perry Cooper
Oct. 8 — The next class action up for argument before the U.S. Supreme Court is likely to be an easy win for plaintiffs, a prominent plaintiffs' attorney tells Bloomberg BNA.
The court will hear oral arguments Oct. 14 in a Telephone Consumer Protection Act, case that raises the issue of whether a proposed class action is mooted when the named plaintiff receives an offer of complete relief on his claim, or, as some say, is “picked off”.
“If I had to place bets on Supreme Court cases, this is the one I would feel most confident in betting that the plaintiffs will win,” Deepak Gupta, founding principal of Gupta Wessler PLLC, a Washington public interest law firm representing consumers and workers, told Bloomberg BNA in September.
But Richard A. Samp, chief counsel for the pro-business Washington Legal Foundation, told Bloomberg BNA in September that based on past Supreme Court rulings in class cases, the justices' votes are stacked against the plaintiffs.
Samp added that how the court rules in this case isn't expected to be nearly as significant as its weighing of two other class cases up for review this term . Those cases are Spokeo Inc. v. Robins, review granted, a consumer suit challenging a plaintiff's standing to sue; and Tyson Foods Inc. v. Bouaphakeo, review granted, a labor case challenging the class status of a group of workers.
“I don't think it's the most important of the cases because if one potential class action plaintiff gets paid off in full and his claim was a solid one, you can bet there will be another class action filed by somebody else,” Samp said.
WLF filed an amicus brief in this case in support of business interests.
The court considered a similar mootness issue two years ago, but in the context of collective actions under the Fair Labor Standards Act, Genesis Healthcare Corp. v. Symczyk.
There, a majority of the court assumed, without deciding, that an unaccepted offer that completely satisfied a claim would moot an individual plaintiff's claim. The majority then decided that when an individual claim is moot, a collective action claim brought under the FLSA also is moot.
But Justice Elena Kagan, joined by three justices in dissent, called the majority's decision “the most one-off of one-offs,” because she said that an unaccepted offer of judgment can't moot a case.
Kagan said that when a plaintiff rejects such an offer, “her interest in the lawsuit remains just what it was before.” An unaccepted offer of judgment is just like any unaccepted contract offer: a legal nullity with no operative effect, she said.
As long as the plaintiff previously had a stake in the outcome of the litigation, and the court could grant relief, then the litigation should carry on after an unaccepted offer of judgment, Kagan said.
Kagan had a “friendly suggestion” for the U.S. Court of Appeals for the Third Circuit, which had ruled in the FLSA case that the individual claim was moot: “Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts of appeals: Don't try this at home.”
Every federal appeals court to consider the issue since Genesis Healthcare has sided with the dissenters.
The Seventh Circuit overruled its precedent endorsing mootness Aug. 6 .
The Fifth Circuit and the First Circuit
Gupta said he would have bet on a win for plaintiffs at the Supreme Court even before the Seventh Circuit's decision, based on Kagan's dissent in Genesis Healthcare.
“Justice Kagan very forcefully articulated the rationale for why the plaintiffs should win,” he said. “I think it's notable that Justice Thomas’ opinion [for the majority] didn't say anything about the issue at all, didn't even really hint at it.”
“At the end of the day the argument on the defendant's side is just incoherent,” Gupta said. “The five justices who may want to do something there will find it harder to do so.”
But Samp stressed that Kagan was in the minority. “She was one of four dissenters so I'd say the odds are stacked against her,” he said.
“As a matter of common sense, it seems to me that if a defendant is willing to pay everything that the plaintiff wants including any award of costs, then a plaintiffs’ lawyer who tries to avoid the case going away because he wants it to be a class action is really in a major conflict with his own client,” he said.
That lawyer “ought to be disciplined for hurting his own client in the hopes of lining his own pocket,” Samp said.
The case here involves unsolicited Navy recruitment ads sent over text message.
Plaintiff Jose Gomez allegedly received the texts as part of the recruiting campaign run by marketing firm Campbell-Ewald Co. He brought TCPA claims on behalf of himself and a purported class.
Campbell-Ewald offered Gomez $1,503 per violation, plus reasonable costs. The amount more than covered the statutory damages Gomez was entitled to receive for violations of the TCPA. But he rejected the offer and moved for certification of the class.
The district court rejected Campbell-Ewald's argument that its offer mooted Gomez's case, but it granted summary judgment to the company, finding that the marketing firm was immune from suit because it was recruiting for the government.
On appeal, the Ninth Circuit agreed that the case wasn't mooted by the defendant's offer. But it rejected the district court's reliance on sovereign immunity .
The Supreme Court agreed to review the case May 18 .
The solicitor general will participate in oral argument on behalf of Gomez. The government said in its brief that the pick off strategy jeopardizes the enforcement of laws that establish private rights of action through which individuals may seek redress in individual or class actions.
In its brief to the Supreme Court, petitioner Campbell-Ewald argues that its offer to Gomez ended a justiciable controversy because Gomez no longer had a personal stake in the litigation.
But respondent Gomez argues in his brief that unaccepted settlement offers aren't legally binding on the parties or the courts.
A case becomes moot “only when it is impossible for a court to grant any effectual relief,” he says. “It remains possible for courts to grant relief after a defendant tenders an offer of settlement or judgment.”
The government adds in its amicus brief that Fed. R. Civ. P. 68, which governs offers of judgment, provides that an unaccepted offer is considered withdrawn, and the plaintiff is left as before with an unsatisfied claim that a court can redress if the claim is found to have merit.
Campbell-Ewald further argues that the fact Gomez alleged class claims doesn't remedy the jurisdictional defect. “A class only acquires a separate legal status if and when the class has been certified by the district court,” it says.
Gomez disagrees, saying class claims remain alive because the named plaintiff “retains an indisputable financial interest in the class certification decision.”
Class certification would allow Gomez to share the attorneys' bill with other class members, he says. And it would allow him to seek an incentive award if the case settles.
The company argues that , despite Kagan's vigorous dissent, the majority's Genesis Healthcare ruling repudiates the rationale that policy concerns about picking off named plaintiffs justify an exception to the rule that a plaintiff's class claims become moot when his individual claim does.
“Genesis Healthcare‘s reasoning applies equally here: a named plaintiff who asserts potential claims of an uncertified class under Rule 23 occupies no better position than an FLSA plaintiff who asserts a collective action before other claimants have opted in,” it argues.
Gomez responds that the majority's analysis in Genesis Healthcare doesn't apply because the court insisted throughout the opinion that class actions under Rule 23 are distinguishable from FLSA collective actions.
Jonathan F. Mitchell of Stanford University in Stanford, Calif., will argue for Gomez.
Gregory G. Garre of Latham & Watkins LLP in Washington will argue for Campbell-Ewald.
Anthony A. Yang, assistant to the solicitor general, will argue for the government.
To contact the reporter on this story: Perry Cooper in Washington at email@example.com
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