Today the U.S. Supreme Court decided Campbell-Ewald Co. v. Gomez, No. 14-857. The question presented was whether an unaccepted offer of full relief on the named plaintiff’s individual claim will render a putative class action moot. The answer is “no,” according to a 5-3 opinion by Justice Ginsburg (with a separate concurrence by Justice Thomas). But the Court left open the question of whether, if the defendant had actually deposited the money being offered into court, or into a bank account payable to the plaintiff, the case would be moot. That is almost certainly what defendants will now do in some putative class actions. The Court eventually will have to decide that question.

Gomez involved a claim for violation of the federal Telephone Consumer Protection Act. The plaintiff received a single unwanted text message on his cell phone (it probably seems absurd to most non-lawyers that this kind of thing is what leads to Supreme Court cases, but Congress provided for even a single unwanted text message to trigger a potential statutory violation). The plaintiff was theoretically entitled to $1,503 plus costs as the maximum recovery under the statute. The defendant offered (both under Rule 68 and as a freestanding offer) to pay the full amount and consent to an injunction, but the plaintiff did not accept the offer.

Justice Ginsburg’s majority opinion adopted Justice Kagan’s dissent in Genesis Healthcare v. Symczyk, concluding that “[a]n unaccepted settlement offer – like any unaccepted contract offer – is a legal nullity, with no operative effect.” (Slip op. at 7.) That result is unsurprising as a matter of contract law and the plain language of Rule 68, which treats an unaccepted offer as withdrawn. Six of the federal courts of appeals reached the same result after Genesis Healthcare.

The majority distinguished other cases in which the defendant had actually paid or deposited the money at issue, or entered into a unilateral covenant not to sue to resolve equitable claims. Importantly, Justice Ginsburg’s opinion made clear that the result might be different if the defendant in this case had deposited the money being offered:

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. That question is appropriately reserved for a case in which it is not hypothetical.

(Slip op., at 11-12 (emphasis added).)

Chief Justice Roberts wrote a dissent joined by Justices Scalia and Alito. The dissent agreed that an unaccepted settlement offer is a legal nullity as a matter of contract law, but viewed the question of whether a “case or controversy” exists under Article III as not controlled by contract law. Chief Justice Roberts reasoned that “[i]f 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, C.J., dissenting, at 9.) Chief Justice Roberts argued that the majority’s focus on the fact that the defendant had not yet tendered the money was exalting form over substance. Because the defendant was a multimillion dollar company, “it would be mere pettifoggery to argue that Campbell might not make good on [its] promise.” (Id. at 5.) Chief Justice Roberts noted that “[t]he good news is that this case is limited to its facts” because “the majority’s analysis may have come out differently if Campbell had deposited the offered funds with the District Court.” (Id. at 10.)

There were two additional separate opinions. Justice Thomas wrote a concurrence focusing on the historical common law practice with regarding to tenders (offers to pay the entire claim), finding that the common law required actual delivery of the money, which was deemed an admission of liability. But Justice Thomas did not reach a conclusion on whether an admission of liability would be required today. Justice Alito wrote a separate dissent, explaining that the “linchpin” for him was the defendant’s clear ability to pay the amount offered. Justice Alito would not find mootness where a defendant’s ability to pay was not clear. He also suggested that depositing the money with the court or a “trusted intermediary,” with delivery of the money to the plaintiff conditioned on dismissal of the case, might be sufficient rather than  actual delivery of the money to the plaintiff. That might avoid the prospect of the delivery of money being potentially characterized as a purported admission of liability.

Gomez was not a win for the plaintiffs’ bar. Defendants seeking to defeat putative class actions by providing complete relief to named plaintiffs will live to fight another day. Defendants will now ignore Rule 68 and simply tender a check to the plaintiff, or pay money into court or use Justice Alito’s tactic of depositing the funds with a “trusted intermediary,” contingent on dismissal of the case when the money is transferred.  Where the defendant provides complete relief on the plaintiff’s individual claim through one of these mechanisms, will that bar the plaintiff from continuing to prosecute a putative class action? There might be a majority of the Supreme Court to support that proposition. But we probably will not know that for a year or two.

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.