Yesterday, the United States Supreme Court accepted certiorari to review the Ninth Circuit's decision in Campbell-Eward Co. v. Gomez, 768 F.3d 871 (9th Cir. 2014), which involved a TCPA class action brought by the recipient of a text message that a contractor, defendant Campbell-Eward, sent on behalf of the U.S. Navy in May 2006. The text message read:
Destined for something big? Do it in the Navy. Get a career. An education. And a chance to serve a greater cause. For a FREE Navy video call [number].
Plaintiff brought both individual and class claims under the Telephone Consumer Protection Act (TCPA), seeking to represent a putative nationwide class of "nonconsenting recipients of the Navy's recruiting messages." Before plaintiff moved for class certification, the defendant tried to moot plaintiff's claims by tendering an offer of judgment under Rule 68 of the Federal Rules of Civil Procedure that, in the defendant's view, would have fully satisfied plaintiff's claims. (Defendant offered to pay $1,503 per violation, plus reasonable costs.) Plaintiff rejected the offer and then moved for class certification.
The Ninth Circuit rejected the defendant's position that its offer of judgment mooted plaintiff's individual and class claims, relying on its precedents in Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 950 (9th Cir. 2013) ("an unaccepted Rule 68 offer that would fully satisfy a plaintiff's claim is insufficient to render the claim moot") and Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1081-1082 (9th Cir. 2011) ("an unaccepted Rule 68 offer of judgment—for the full amount of the named plaintiff's individual claim and made before the named plaintiff files a motion for class certification—does not moot a class action"). The court declined to reconsider Diaz and Pitts in light of the Supreme Court's ruling in Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013) that a Rule 68 full-relief offer mooted a collective action brought under the FLSA. (The Court assumed, without deciding, that such a Rule 68 offer mooted the plaintiff's individual claim.) While the Ninth Circuit acknowledged that language in Genesis Healthcare "undermined some of the reasoning" employed in Diaz and Pitts, it held its prior cases were still good law because of the important differences between class actions and FLSA collective actions.
The questions presented were:
- 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.
- 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.
- Whether the doctrine of derivative sovereign immunity recognized in Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), for government contractors is restricted to claims arising out of property damage caused by public works projects.
We will continue to follow this case, which will hopefully bring clarity to the role Rule 68 offers of judgment have in class action proceedings.
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