Supreme Court decision suggests possible remedies employers can utilize to minimize or even potentially eliminate consumer class action lawsuits.
Many commentators have championed the recent ruling in Campbell-Ewald Co. v. Gomez, No. 14-857 as a win for consumers. However, a closer reading of the decision shows it is not quite the home-run for the plaintiff’s bar and, through Chief Justice Roberts’ dissent, actually provides some silver linings to businesses faced with the class action lawsuits.
Campbell-Ewald, involved a rather large class-action lawsuit against a business involving unsolicited text messages often referred to as or “junk texts” that violate the Telephone Consumer Protection Act (“TCPA”). The potential class was approximately 100,000 people who received these junk text messages from Campbell-Ewald which under the TCPA can cost an employer up to $1,500.00 for each single violating junk text message. The business then faced a very large multi-million potential judgment if found liable for violating the TCPA.
During the course of the litigation the business presented an “offer of compromise” agreeing to pay all damages, attorneys’ fees and costs to just the named plaintiff. Essentially agreeing to give the plaintiff everything he was individually entitled to under the law. The named plaintiff rejected the offer of compromise and elected to proceed on behalf of himself and the other 100,000 class members.
For the purposes of this article we do not need to go into detail about the primary elements of the case – which involved whether the Federal court had jurisdiction to hear the matter. This article’s focus is instead on an interesting concept raised in Chief Justice Roberts’ dissent.
In his dissent, Roberts stated that had the company actually deposited the amount stated in their offer with the Court itself then the Plaintiff would have no ability to proceed forward with the class. As Roberts stated during oral arguments “If you’re getting everything you want, what is the case or controversy? What is the live dispute in which you have a personal stake? … You won’t take ‘yes’ for an answer!” Roberts continued with this line of thought in his written dissent, stating “Although [plaintiff] nonetheless wants to continue litigating, the issue is not what the plaintiff wants, but what the federal courts may do,” Roberts said. “Federal courts exist to resolve real disputes, not to rule on relief already there for the taking.”
While Robert’s dissent does not establish legal authority, it will be interesting to watch what happens when the next company faced with defending against a TCPA class action tests Justice Robert’s point on escrowing funds with a court to see if a lower court will agree that doing so eliminates federal jurisdiction for a class-action to proceed forward.
Should you have any questions about business class action law suits or any other law that may affect your business, or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
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