MIAMI (Legal Newsline) – Weeks before the head of a national trial lawyers group condemned a legal maneuver used by businesses in attempts to fight class action lawsuits, the group was accused of using the same move – by one of its own members.
The American Association for Justice – a lobbying group for plaintiffs lawyers that was formerly known as the Association of Trial Lawyers of America - was a defendant in a lawsuit filed by Miami attorney Timothy Blake, who alleged he’d received a fax that violated a federal telemarketing law.
Blake, who wrote in his 2014 complaint that he’s been a member of AAJ for more than three decades, alleged the AAJ benefited from faxes sent regarding a health insurance plan because it receives royalty payments from the insurer when AAJ members sign up.
While fighting the lawsuit, the AAJ made a Rule 68 offer of judgment in December to Blake. The AAJ offered Blake an amount equal to or greater than what he was requesting as an individual in an effort to end the case before it became a full-fledged class action, though Blake wished to continue the lawsuit as the lead plaintiff of a class.
The offer was $2,000, enough to cover the costs of one violation of the federal law.
“This judgment amount represents AAJ’s total liability for any and all of Plaintiff’s losses, claims, damages and any other amounts or expenses that may have been recoverable… from AAJ on Plaintiff’s individual claims in this action,” the AAJ wrote in its Rule 68 offer.
“This offer is intended to fully satisfy Plaintiff’s individual claim asserted in this action or which could have been asserted in this action.”
According to the AAJ’s own president, using Rule 68 offers to end class actions in preliminary stages is unfair. In the wake of a January U.S. Supreme Court ruling that said those offers couldn’t moot class action lawsuits, Linda Lipsen released a statement praising the 6-3 decision.
“Class actions are necessary to help ensure fairness and efficiency in our judicial system,” Lipsen’s statement said.
“By allowing groups of similarly harmed individuals to join together, the Supreme Court ensured that Americans with even the most limited means can hold the most powerful corporations accountable for wrongdoing.
“An alternative result in this case would have upended that balance and, as Justice Ginsburg writes, ‘would place the defendant in the driver’s seat’ of the civil justice system.”
The AAJ release said Rule 68 offers threatened the viability of class actions and threatened to allow defendants to pick off named plaintiffs in order to extinguish entire class actions.
In the case against the AAJ, the plaintiff, Blake, attempted to strike the Rule 68 offer on Dec. 11. His concern about the Rule 68 offer made to him was similar to the stance the AAJ took more than a month later, after the U.S. Supreme Court ruling
Blake said the offer was “merely an attempt to pick-off the named Plaintiff, create a conflict between Plaintiff and the putative class, and undermine this consumer class action.”
Blake said courts have ruled that Rule 68 offers like the one he received create conflicts of interest between class representatives and the putative classes they seek to represent.
“Accordingly, Defendant AAJ’s Offer of Judgment is an improper attempt to thwart this class action and create a conflict between the named Plaintiff and the class he seeks to represent,” Blake’s attorneys wrote.
“Based upon the weight of the above authority, Defendant AAJ’s purported Offer of Judgment should be stricken and deemed ineffective.”
Blake was represented by the Social Justice Law Collective and Bennett & Bennett in Coral Gables, Fla.
Ten days after the motion to strike, Blake and his attorneys voluntarily dismissed their case without prejudice, meaning they could refile in the future. Court records do not offer the reason for their decision.
The fax in question was sent to AAJ members about the organization's creation of a Health Care Marketplace for them and their employees. It included seven listed benefits of joining the program, but Blake said it did not include instruction on how to opt out of receiving future faxes, in violation of federal law.
The AAJ, in a motion to dismiss that was denied on Sept. 1, said there is a debate as to whether opt-out notices are required for solicited faxes.
The AAJ was represented by Podhurst Orseck in Miami and Jones Foster Johnston & Stubbs in West Palm Beach, Fla.
The U.S. Supreme Court ruling came in Jose Gomez’s case over unsolicited text messages against Campbell-Ewald, which had made a Rule 68 offer to him - $1,503 per violation and reasonable costs.
When he denied the offer, the company said the offer of judgment should have ended the case.
The court affirmed a decision by the U.S. Court of Appeals for the Ninth Circuit.
From Legal Newsline: Reach editor John O'Brien at jobrienwv@gmail.com.