What happens when a company in a class action lawsuit offers the named plaintiff complete relief before a class is certified? If the plaintiff’s claim is mooted by such an offer – regardless of whether the offer is accepted — can the class action proceed?
In a 6-3 ruling today by Justice Ruth Bader Ginsburg, the high court held in Campbell-Ewald Company v. Gomez that companies could not pick off plaintiffs in an effort to defeat the class.
In the case, the company – sued for sending unsolicited text messages to nearly 100,000 people – attempted to eliminate the named plaintiff, Jose Gomez, by offering him full settlement before the court certified the class and allowed it move forward with the lawsuit. Gomez refused the offer, but the company claimed that with their offer he had no injury to complain about and the case was thus mooted.
Trying to get the first-named plaintiffs in a class action to settle early has long been a defense tactic. For that reason, attorneys bringing such a case often try to name several individuals as plaintiffs, but even that doesn’t ensure that the case can proceed in the face of settlement offers.
Advocates of class actions say such cases provide necessary avenues of relief for large numbers of consumers for whom individual lawsuits would be cost prohibitive. Allowing the defendant companies to pick off plaintiffs and short cut these cases would severely limit their viability as a tool for consumer relief.
The court’s decision, in which Chief Justice John Roberts and Justices Antonin Scalia and Samuel Alito dissented, is here.