Supreme Court Holds That Unaccepted Settlement Offer Does Not Moot Class Action

The United States Supreme Court recently held that an unaccepted offer of judgment pursuant to Federal Rule of Civil Procedure 68 did not render a class action claim moot, but the Court did not rule on whether the claim would be moot if the lower court had entered a judgment for the plaintiff. See Campbell-Ewald Co. v. Gomez, 2016 WL 228345 (U.S. Jan. 20, 2016). In the case, the plaintiff alleged that he had received unsolicited text messages from the defendant as part of an automatic dialing system in violation of the Telephone Consumer Protection Act (“TCPA”). Before the plaintiff moved to certify a class, the defendant made a settlement offer of $1,503 per text message, plus costs, which would have exceeded what the plaintiff was entitled to under the TCPA. The plaintiff did not accept the offer and, after it expired, the defendant moved to dismiss the case, arguing that the offer would have given the plaintiff complete relief and there was no longer any case or controversy. As the plaintiff had not moved for class certification, the defendant argued that the putative class claims also became moot and should be dismissed. The District Court denied the motion to dismiss and the United States Court of Appeals for the Ninth Circuit affirmed. The Supreme Court affirmed the lower courts’ decisions, holding that the plaintiff had not received anything from the expired settlement offer and that the complaint stood “wholly unsatisfied.” The Court did not, however, address “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” and “reserved [that issue] for a case in which it is not hypothetical.” For an analysis on a recent decision that addressed that hypothetical issue, please see: New York Federal Court Holds That Offer of Judgment to FDCPA Plaintiff Rendered Class Action Moot For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.