Campbell-Ewald Co. v. Gomez was argued yesterday in the U.S. Supreme Court. It is one of several major class action cases that will be decided by the Court this Term. It presents the question of whether a putative class action case becomes moot when the defendant offers complete relief to the named plaintiff (for more detail on the case, see my June 16 blog post). If the Court rules that an offer of complete relief renders a case moot (or otherwise dead), and that a named plaintiff cannot pursue a class action in that circumstance, that could potentially put an end to many small dollar value consumer class actions as we know them. Unless the plaintiffs’ lawyers could assemble a very large number of plaintiffs, the defendant could easily resolve the case for far less then it will pay to defend it, simply by paying the small claims of the named plaintiffs. Plaintiffs might try for declaratory or injunctive relief, but those remedies also may not be viable where damages are an adequate remedy, the named plaintiffs have been fully paid, and the plaintiffs cannot show that they are likely to have another similar claim against the defendant in the future for which declaratory or injunctive relief would be an appropriate remedy.
Based on the transcript of yesterday’s oral argument, this is shaping up as a very interesting case. There were a few questions about whether the offer in the case was really for complete relief, but the Court seemed to move past that issue fairly quickly. Most of the justices seemed to agree that when a defendant offers complete relief (the precise mechanism for which was debated), the case must end. Justice Ginsburg suggested that, even in that circumstance, the plaintiff should be entitled to pursue a judicial finding of liability, but based on other justices’ comments that position seemed unlikely to be adopted by a majority. There was a lot of debate about, when the defendant offers complete relief, precisely how the case should end – whether it should be a finding of mootness, or a judgment based on the offer, or whether such a ruling should be made at the summary judgment stage of a case (as Justice Sotomayor suggested). Chief Justice Roberts appeared to be strongly of the view that if the plaintiff is getting everything he or she wants, there can be no case or controversy, and the court system has an interest in not issuing a ruling in that circumstance. Justices Alito and Kennedy appeared to suggest that if the defendant simply delivers cash or a certified check, that should put an end to the case. Plaintiff’s counsel suggested that should be a merits issue or an affirmative defense, but not render a case moot. Justice Breyer suggested that the defendant could simply pay the money into court, “[a]nd, of course, if that person [i.e., the named plaintiff] now has all he wants, he can’t certify this is a class because he isn’t harmed.” Justice Breyer suggested that whether a judgment was entered for the named plaintiff would not make any difference. (Transcript, at 48.) Other than these comments from Justice Breyer, and some from Chief Justice Roberts, there was not a lot of discussion about the issue of whether a class action can continue when the named plaintiff’s claim has been fully paid.
Attempting to read the tea leaves from the justices’ comments and questions (and that is always an effort at guesswork at which I could be wrong), I’m seeing a distinct possibility that a majority of the Court might recognize an avenue through which a defendant can defeat a class action, at least by tendering a certified check to the named plaintiff or paying that money into court. If Justices Kennedy and Breyer are thinking along those lines, there might be five votes on the Court for that position, although it’s not squarely presented by the facts of the Campbell-Ewald case. And that proposition would certainly change class actions as we know them.
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