Supreme Court Holds Unaccepted Offer of Judgment for Complete Relief to Named Plaintiff in Putative Class Action Does Not Moot Claims

The Supreme Court of the United States recently issued its ruling in Campbell-Ewald v. Gomez, a closely watched appeal in which the Court held that a complete offer of relief to a named plaintiff in a class action does not moot the individual’s claim. As explained by Justice Ginsburg, writing for the majority and drawing upon lessons taught to a “first-year law student,” an unaccepted settlement offer “creates no lasting right or obligation,” “has no force,” and, thus, “is a legal nullity, with no operative effect” that “does not moot a plaintiff’s case.” The Court’s opinion follows up on its 2013 decision in Genesis Healthcare Corp. v. Symczyk, in which it assumed that an offer of complete relief, even if unaccepted, moots a plaintiff’s individual claim to the extent the plaintiff’s Fair Labor Standards Act (“FLSA”) collective-action allegations could not stand on their own.

For a discussion of the underlying case in Campbell-Ewald, visit our June 2015 blog. By way of background, in Campbell-Ewald, the plaintiff brought a class action suit claiming the defendant violated the Telephone Consumer Protection Act (“TCPA”) by transmitting unsolicited marketing text messages. The defendant responded by serving a Rule 68 offer of judgment, offering to pay three dollars above the maximum allowable statutory recovery, plus reasonable costs. The plaintiff rejected the offer by allowing it to lapse. The defendant moved to dismiss, alleging the rejection of the offer mooted the named plaintiff’s individual and putative class claims, but the District Court denied the motion and later dismissed on other grounds. On appeal, the Ninth Circuit concluded that the plaintiff’s individual claim was not mooted by his refusal to accept the settlement offer.

The Supreme Court affirmed, explicitly adopting Justice Kagan’s dissent in Genesis Healthcare Corp. In applying Justice Kagan’s reasoning to the facts of Campbell-Ewald, the Court confirmed that “an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case,” and it therefore affirmed the Ninth Circuit’s decision and remanded the action.

In dissent, Chief Justice Roberts, Justice Alito, and the late Justice Scalia centered on the “straightforward” issue of whether an actual case or controversy existed for purposes of Article III standing. Chief Justice Roberts reasoned that a defendant’s agreement to provide complete relief for the injury moots any case or controversy because the plaintiff’s “mere desire” to continue the litigation, does not make it “necessary” for the court to adjudicate the merits of the dispute. In a separate dissenting opinion, Justice Alito emphasized that the “linchpin for finding mootness” is the lack of any dispute that the defendant would “make good on its promise” to pay plaintiff complete relief.

Critically, as noted by Chief Justice Roberts, the majority did not consider “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.” Thus, although “[t]he majority holds that an offer of complete relief is insufficient to moot a case,” the question of whether “payment of complete relief leads to the same result” remains open.