Supreme Court says class claim not mooted by unaccepted offer of complete relief

Faced with an explosion of class action claims, companies, particularly employers, have looked for creative ways to nip such claims in the bud. One strategy that defendant companies have tried is an offer of full relief to the class representative in hopes that the claim will be settled or rendered moot by the offer of complete relief. Plaintiffs have taken issue with that approach and challenged a defendant’s ability to moot such claims when the offer is unaccepted. On January 20, 2016, the Supreme Court addressed that very issue in Campbell-Ewald Co. v. Gomez, finding that an unaccepted offer of judgment for complete relief will not moot a plaintiff’s claim in a class action lawsuit.

While the plaintiff in Campbell-Ewald filed suit under the Telephone Consumer Protection Act, the holding of this case is widely applicable to class actions, particularly those filed under the Fair Labor Standards Act.

In Campbell-Ewald, the plaintiff sued under the Telephone Consumer Protection Act after receiving text message solicitations for which he had not given his consent, or “opted in.” Prior to the deadline for the plaintiff to file his motion for class certification, the defendant issued an offer of judgment for complete relief. The plaintiff did not accept the offer within the prescribed 14-day period. This prompted the defendant to move to dismiss the case for lack of subject matter jurisdiction, arguing that the plaintiff’s failure to accept complete relief rendered his individual claim moot. The defendant further argued that because he had not filed the motion for class certification before the offer was made, the entire class action became moot as well.

The Supreme Court rejected the defendant’s argument. The Court decision recognized that the Constitution limits federal court jurisdiction to actual “cases” and “controversies,” requiring that a plaintiff have a concrete interest in the outcome of the litigation. However, the Supreme Court concluded that an offer of judgment, once rejected, does not moot the plaintiff’s complaint in a class action lawsuit. Absent the plaintiff’s acceptance of the offer of judgment, the controversy essentially remains active and both parties retain their respective interests in the litigation.

The Supreme Court chose not to address a related issue – if a defendant not only offers complete relief, but goes so far as to tender payment of complete relief into an account payable to the plaintiff, will the plaintiff’s claim and the class action become moot? For now, this question remains unanswered.