WASHINGTON (Legal Newsline) - Plaintiffs attorney David Stein readily admits that the U.S. Supreme Court’s ruling in January -- that an unaccepted offer of complete relief to a named plaintiff in a class action does not moot the plaintiff’s claim -- is helpful to attorneys such as himself.
But he also claims that defense attorneys will continue to attempt to find “workarounds” to the court’s decision in Campbell-Ewald Co. v. Gomez.
“You see, defendants keep trying to recalibrate and find ways to moot these cases,” Stein told Legal Newsline.
Some defense attorneys advise defendants, especially companies, to try to head off class action lawsuits through self-initiated unilateral market actions, for example.
“It’s very tactical and very much aimed at nipping litigation in the bud instead of advancing it,” Stein said, adding that many class action lawsuits, in fact, are warranted.
Stein, who is of counsel to Girard Gibbs LLP and a partner at Gibbs Law Group LLP, often represents consumers in complex consumer protection and financial fraud cases against Fortune 100 companies.
He said in a lot of cases, voluntary reimbursement or relief is not enough for plaintiffs. Campbell-Ewald had offered payment of the statutory violation claimed personally by the plaintiff in an effort to pick him off as lead plaintiff.
“Certainly, there are cases out there where, after a customer program like a recall, they’re still going to proceed with litigation,” said Stein, who has represented plaintiffs in class actions against various automakers. “And rightly so. Their vehicles, for instance, may no longer have the resale value or maybe they now believe they overpaid for the car.
“There are certainly going to be instances where consumers look at the situation and appreciate the (company’s) efforts, but feel there are other ways they’ve been harmed that those efforts don’t address.”
Stein said he thinks Campbell-Ewald’s move in the Gomez case -- offering plaintiff Jose Gomez $1,503 per violation, plus reasonable costs -- was purely “tactical.”
“It wasn’t about customer satisfaction,” he said.
The nation’s highest court ruled 6-3 that the U.S. Court of Appeals for the Ninth Circuit’s 2014 decision in Gomez was correct. The Ninth Circuit vacated and remanded a summary judgment ruling in favor of the defendant in a case brought under the Telephone Consumer Protection Act, or TCPA.
However, the Supreme Court said it would not 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,” Justice Ruth Bader Ginsburg wrote in the majority opinion.
Before Gomez, Stein said most courts already treated unaccepted offers as not having any effect.
But the Supreme Court’s decision has since left open the question of what happens when money is tendered -- as in, deposited with the court.
“Obviously, the next step for defendants is going to be, hey, we’ve made these offers and that didn’t get the job done, so let’s actually deposit the money and see what happens,” Stein said.
So far, the U.S. Court of Appeals for the Ninth Circuit and the U.S. Court of Appeals for the Sixth Circuit are the only federal appellate courts to consider that very issue.
In Chen v. Allstate, the Ninth Circuit ruled that defendant Allstate Insurance Company could not put an end to a class action lawsuit by depositing $20,000 in a court-controlled, bank escrow account.
Allstate had argued the amount would moot the named plaintiff’s claims.
The Ninth Circuit, in its April ruling, affirmed an order by the U.S. District Court for the Northern District of California denying Allstate’s motion to dismiss.
“Under Supreme Court and Ninth Circuit case law, a claim becomes moot when a plaintiff actually receives complete relief on that claim, not merely when that relief is offered or tendered,” Circuit Judge Raymond C. Fisher wrote in the panel’s ruling.
The defendant in Mey v. N. Am. Bancard LLC, credit-card processing company North American Bancard LLC, unlike the defendant in Gomez, mailed the plaintiff’s attorney a cashier’s check for $4,500 for three calls that NAB believes it made to Mey.
NAB argued that because the Supreme Court drew a distinction between offering funds -- which does not moot a plaintiff’s claim -- and tendering -- which does -- its sending Mey a cashier’s check is a tender that moots Mey’s claims.
But the Sixth Circuit, in its July decision, rejected NAB’s argument, at least in light of the facts before it.
“Even if we assume that an unaccepted cashier’s check could moot a claim, NAB has not shown that its tender satisfies Mey’s demand for relief, which the tender must do if it is to moot Mey’s individual claims,” Circuit Judge Danny Boggs wrote for a three-judge panel.
Stein said while it’s difficult to predict the future of any legal issues, he thinks it’s “inevitable” the Supreme Court will be forced to revisit this one.
“I’m guessing that the issue of tendering money is what the Supreme Court will end up hearing next,” he said.
He noted, though, that such defense tactics, including heading off class actions, tend to be tried in cases where not as many consumers are “coming out of the woodwork” with complaints.
“If there’s a problem that has a lot of people upset, paying them off ends up turning into a game of whack-a-mole,” Stein explained. “For us, for my firm, when we file a class action lawsuit, a vast majority of the time we’re hearing from people (who have been affected) on a daily, weekly or monthly basis.”
But he admitted those tactics might prove more successful in TCPA cases.
“There usually aren’t as many people so angry about getting a text message or phone call that they want to participate in litigation,” Stein said.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.