Campbell-Ewald: SCOTUS (Still) Doesn't Resolve Class Action "Pick-Offs"
In this morning’s 6-3 ruling in Campbell-Ewald v. Gomez, the Supreme Court, with Justice Ruth Bader Ginsburg writing for the majority, ruled that a defendant’s offer to settle in full the claim of a named plaintiff did not in itself avail to moot the claim and thus (its goal) knock-out the associated class action. The case, which John Elwood and Conor McEvily previewed in their contribution to the latest Cato Supreme Court Review, is the latest in a series–notably Genesis Healthcare Corp. v. Symczyk three years ago–raising the question of when and whether defendants can end a group action by “picking off” named plaintiffs. While this case on its face is a win for the liberal side and embraces the analysis argued previously by Justice Elena Kagan in her Genesis dissent, it still leaves important elements of the wider question unresolved, while giving Justice Clarence Thomas the chance to write an interesting concurrence asking whether either camp of justices is asking the right questions.
Dissenting Chief Justice John Roberts (joined by justices Antonin Scalia and Samuel Alito) argues that an individual lawsuit that has been met with a fully adequate offer of settlement has ceased to be a “case or controversy,” the only sorts of disputes our courts may adjudicate. (Because the federal law that underlies the suit – the Telephone Consumer Protection Act, or TCPA – has a statutory maximum for damages, it is reasonably knowable what constitutes full relief for plaintiff Gomez.) By contrast, the majority points out with some force that a valid claim countered with a full offer of settlement is not in quite the same posture as a grievance that never became a valid claim in the first place. Ginsburg, Kagan, et al. would apply principles of contract to an offer of judgment made under federal Rule 68 and, under such principles, a contract offer–handsome or otherwise–need not be accepted.
Justice Clarence Thomas, concurring separately, disagrees with both sides’ approach. He is not satisfied with the conservatives’ somewhat Legal Realist approach (if one may call it that) as to when a case or controversy has ceased, but is equally wary of the liberals’ resort to contract principles (laying a legal controversy to rest is not quite the same thing as contract-making, even if they have much in common.) Instead, he would look to the early common law of tenders, which preceded (and led up to) what is now Federal Rule 68 on offers of settlement. Thomas concludes that in this particular case common law analysis would lead to the same destination as reached by the majority.
While this morning’s outcome is being hailed in some quarters as a huge victory for class actions, note well the narrowing language on pages 11 and 12 of Justice Ginsburg’s opinion, which suggests a concern to keep courts rather than the parties or their lawyers in final control:
We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.