On October 14, 2015, the United States Supreme Court heard oral argument in Campbell-Ewald Company v. Gomez, 14-SC-857.  The plaintiff in Gomez alleged he received an unsolicited marketing text message advertising the US Navy from the marketing firm Campbell-Ewald Company in violation of the Telephone Consumer Protection Act (“TCPA”).  The plaintiff sued on the Campbell-Ewald Company on behalf of himself and a putative class.

The facts of the case present a classic example of an effort to “pick off” a putative class representative with an offer of judgment under Rule 68.  Specifically, prior to class certification, the Campbell-Ewald Company made an offer of judgment to Gomez in an amount which allegedly would have afforded Gomez the full relief to which he (but not necessarily his putative class) would be entitled under the TCPA, which Gomez rejected.  The Campbell-Ewald Company then moved to dismiss, alleging that the rejection of their settlement offer rendered Gomez’s claim moot. A federal District Court denied the motion, but later found that because the Campbell-Ewald Company was working for the U.S. Navy when it sent the text, the doctrine of derivative sovereign immunity applied.

The Gomez opinion was appealed to the Ninth Circuit Court of Appeal which reversed the District Court’s ruling that derivative sovereign immunity applied, distinguishing the prior authority on the issue on the facts, since each case was decided in the context of property damage resulting from public works projects.

While the derivative sovereign immunity issue is a case of first impression on these facts, the attempt to pick off the class rep with an offer of judgment is a fact pattern that has made its way to federal appellate court’s many times already.  In contrast to the Ninth Circuit’s ruling in Gomez, the Third and Seventh Circuit have held that a rejected offer of judgment which affords the class rep full relief serves to moot the case if the class action has not already been certified. While the Eleventh Circuit, has held that rejected offer of judgment for full relief does not moot an individual’s claim, it has not ruled in the context of a class action.  However, by extension, one expect the Eleventh Circuit to hold, as the Ninth Circuit held in Gomez, that such offers of judgment would not moot a class representative’s claim.  Numerous other Circuit Courts have held, in the individual context, that a rejected offer of judgment affording full relief would moot an individual claims, which suggests but does not necessarily ensure that they would find mootness in the context of a putative class action.

The Supreme Court was asked to resolve this circuit split and address the following questions:

(1) Does a case become moot when a plaintiff receives an offer of complete relief for his claim? If so, is the answer different when the plaintiff has asserted a class action claim but receives the offer of complete relief before any class is certified?

(2) Is the doctrine of derivative sovereign immunity limited to claims arising out of property damage caused by public works projects?

The spirited oral argument did not disappoint. The oral argument is available both in audio and unofficial transcript form here.

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