United States: Can an Offer of Judgment to the Named Plaintiff Moot a Class Action? Supreme Court Hears Arguments in Campbell-Ewald Co. v. Gomez

Last Updated: October 16 2015
Article by Archis A. Parasharami

Can a named plaintiff press ahead with a class action if he or she "won't take 'yes' for an answer"? That colorful question, which Chief Justice Roberts asked counsel for the respondent during oral arguments yesterday in Campbell-Ewald Co. v. Gomez, is at the heart of the debate over whether offers of judgment can moot class actions. By the end of the oral argument (pdf), it seemed clear that a number of the Justices were concerned about allowing a plaintiff whose individual claims would be fully satisfied by an offer of judgment to nonetheless invoke the machinery of the federal courts.

Stated more precisely, the two key issues presented in Campbell-Ewald are: (1) "Whether a case becomes moot, and thus beyond the judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim"; and (2) "Whether the answer to the first question is any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified."

Does an offer of complete relief to the plaintiff end the case?

As to the first question—the issue of mootness—the oral argument proceeded along two lines.

Is the offered relief really "complete"? First, the Justices debated whether the offer of judgment in the case—a TCPA class action—actually provided the plaintiff with "complete relief." The offer clearly involved a promise to pay the full statutory damages theoretically available for the named plaintiff's claims, and it also involved an agreement to have the district court enter an injunction prohibiting the challenged practices. But—in addition to disagreeing about whether the request for class status made a difference—the parties disputed whether the absence of an offer to pay the plaintiff attorneys' fees rendered the offer of judgment incomplete. Justice Kagan suggested that "'complete relief' means what the plaintiff has asked for," noting that "[t]he plaintiff has asked for attorneys' fees here." And while counsel for the company explained that "the TCPA . . . does not provide for attorneys' fees," Justice Kagan rejoined that "that's a merits question as to whether they're entitled to attorneys' fees." But as a colloquy between Justice Scalia and the company's counsel showed, that approach would prove too much by allowing any request for relief (no matter how fanciful) to make an offer of judgment incomplete:

JUSTICE SCALIA: "I suppose he could ask for the key to Fort Knox, right? . .. And then . . . no settlement offer would . . . suffice, right?"

[PETITIONER'S COUNSEL]: "He could ask for a unicorn, Your Honor."

JUSTICE SCALIA: "He could ask for a unicorn."

So long as unicorns and attorneys' fees are equally unavailable under the TCPA, then (as Justice Scalia observed), there is no reason why a court "can't dispose of that initially . . . in connection with the mootness" inquiry.

Jurisdictional dismissal or entry of judgment? Because Article III of the Constitution allows the federal courts to adjudicate only concrete disputes, it requires "adversity" between the parties, as the Chief Justice and Justice Kennedy each observed. A number of questions that the Justices asked of counsel for the plaintiff sought to identify whether the requisite adversity exists when an offer of complete relief has been made.

Justice Breyer asked whether it would make a difference if a defendant "tender[ed] the money"; for example, if the defendant deposited the amount of the offer of judgment with the clerk of a district court. Similarly, Justice Alito asked whether a plaintiff would have a live claim if a defendant gave "a stash of cash" or "a certified check" to the plaintiffs' counsel. And Justice Kennedy raised a similar hypothetical. Each of these hypotheticals essentially asked plaintiff's counsel: What's your (remaining) beef?

Counsel acknowledged that a plaintiff in that setting could not obtain any additional concrete relief ("[h]e shouldn't get anything in addition to what he's already received"), that the sole remaining interest was in procuring a judgment; and that the claim in that hypothetical would properly be dismissed (although, in his view, on the merits rather than on jurisdictional grounds).

As counsel for the plaintiff put it: "Everyone agrees, Justice Kennedy, that under your hypothetical the case should be thrown out of court. The only dispute is whether it's thrown out of court on jurisdictional grounds under Article III or whether it's bounced on the merits because the defendant has an affirmative defense."

A number of the Justices appeared interested in an alternative possibility raised by the defendant—a "forced" entry of judgment over the plaintiff's objection. In her dissent in Genesis Healthcare Corp. v. Symczyk, Justice Kagan argued that a finding of mootness is improper in the context of an "unaccepted" offer of judgment because—in at least some courts—a mootness holding might mean that a plaintiff's claim is dismissed for lack of jurisdiction and the plaintiff does not receive the individual relief specified in the offer of judgment. But other courts have said that the consequence of a plaintiff's failure to "say yes"—i.e., to accept an offer of complete relief—is that the court should enter an order on the terms specified in the offer of judgment and then bring the case to a close. Such a judgment would not be a judgment on the merits—because nothing was adjudicated—and therefore would not have preclusive effect, but it would give a plaintiff a judicial entitlement to the relief offered by the defendant.

Does the fact that the plaintiff wants to represent a class matter?

Comparatively less attention was paid to the second question presented: It seems that many (though certainly not all) of the Justices think that whether the plaintiff has brought a putative class action makes no difference. Of course, the realities of class action litigation surfaced throughout the argument. For example, Justice Alito asked whether "this is a case where the class action attorneys are going to get a lot and the members of the class are going to get virtually nothing?" And the Chief Justice pointed out that "[t]his is all about class certification"—apparently meaning that the named plaintiff's central reason for rejecting the offer of judgment was solely so that he could attempt to pursue a class action lawsuit. Justice Breyer similarly asked whether, if a named plaintiff receives full payment for his individual claims, "[t]he only thing that's left is [that] you'd like, says the plaintiff, class certification, or at least the lawyer would."

On a related note, Chief Justice Roberts pressed the Assistant Solicitor General on whether a plaintiff who receives an offer of judgment for full relief of his claims would be an adequate class representative. The lawyer acknowledged that "I think that's [a] hard [question]," ultimately suggesting that "[a plaintiff] who says, I'll just accept my money and drop the interests of the class, . . . you wonder whether that ... plaintiff is actually a good adequate representative." But in my view, that answer simply underscores that the only interest such a plaintiff is pressing is one that might affect other people, rather than the plaintiff himself or herself in a concrete and personal way.


Predicting the outcome of Supreme Court cases from an oral argument is always risky, and I won't try to do so here. But I did come away from the argument with some reactions:

" There was little in the way of argument by counsel for plaintiffs about whether the situation presented in Genesis Healthcare—collective actions under the FLSA—can be distinguished from class actions under Rule 23. Whether a meaningful distinction exists—and I do not think it does—is at the heart of the second question presented in this case.

" On the first question, the decision under review by the Ninth Circuit had adopted the views of Justice Kagan's dissent in Genesis Healthcare nearly wholesale. Although the five Justices that formed the Genesis Healthcare majority decided that the mootness question had been waived in that case, given the Court's flexibility in addressing considerations of waiver, it is fair to presume that those five Justices were not persuaded by Justice Kagan's dissent. Nothing that took place at oral argument suggested that members of the Genesis Healthcare majority had any reason to depart from their prior analysis.

" If anything, the oral argument served to highlight that, when a defendant makes an offer of complete relief to a named plaintiff, the only remaining interests that the plaintiff possesses are (1) an abstract interest in obtaining an order from a court that has no additional practical significance; and (2) the hope of serving as the representative of a putative class. These are not the interests of ordinary people; they are the interests of lawyers. And the Supreme Court has (as it should) looked askance at assertions of Article III standing that are lawyer-driven rather than client-driven.

What will the Court do? We'll know by next June (and probably sooner). In the meantime, defendants will doubtless look for ways to reduce the transaction costs of class action litigation by making offers of complete relief to named plaintiffs when it makes practical sense to do so.

Tags: Adequacy, Campbell-Ewald Co. v. Gomez, Class Certification, Fair Labor Standards Act, Fed. R. Civ. P. 23, Fed. R. Civ. P. 68, Genesis Healthcare Corp. v. Symczyk, mootness, Telephone Consumer Protection Act

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