WASHINGTON (Legal Newsline) - Though the U.S. Supreme Court earlier this year ruled that an unaccepted offer of complete relief to a named plaintiff in a class action does not moot the plaintiff’s claim, the decision isn’t necessarily a boon for plaintiffs lawyers, one class action defense attorney argues.
That includes those plaintiffs lawyers who frequently bring class action lawsuits over Telephone Consumer Protection Act violations, said Henry Pietrkowski, an attorney at the Chicago office of Reed Smith LLP.
A big part of Pietrkowski’s practice is defending TCPA cases -- usually dozens each year. At first they were lawsuits over junk or “blast” faxes, and now it’s mostly robocalls and text message claims, he said.
In its January ruling, the Supreme Court didn’t say anything specifically about the federal law, but addressed the so-called “pick off” defense. It’s a tactic in which a consumer class action defendant -- often companies -- can try to head off class claims by offering the named plaintiff his or her full measure of claimed damages.
In Campbell-Ewald Co. v. Gomez, the plaintiff alleged Campbell-Ewald violated the TCPA by sending -- through a third-party vendor -- unsolicited text messages on behalf of the U.S. Navy.
Campbell-Ewald, in return, offered Jose Gomez $1,503 per violation, plus reasonable costs. The offer was rejected.
The U.S. Court of Appeals for the Ninth Circuit held that the unaccepted offer did not moot the named plaintiff’s individual claims or the putative class claims.
The Supreme Court ruled 6-3 that the Ninth Circuit’s 2014 decision was correct.
Before Gomez, some courts accepted that an offer of judgment mooted the plaintiff’s claim and deprived the court of Article III jurisdiction. Because the plaintiff’s claim is moot, there is no “case or controversy” as required for the court to have jurisdiction.
While the Supreme Court indeed eliminated a tactic TCPA class action defendants could use in the past to limit class action liability, Pietrkowski, a member of Reed Smith’s Financial Industry Group, argues the ruling hasn’t really changed much -- for either side.
“Gomez, I don’t think, has greatly changed the landscape (of TCPA class action litigation),” he told Legal Newsline.
While he readily admitted the decision isn’t a great one for TCPA defendants, Pietrkowski noted that it did leave a narrow opening for defense attorneys, such as himself.
The justices, in their ruling, said they 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.
Basically, the Supreme Court’s decision has left open the question of what happens when money is tendered -- as in, deposited with the court.
“The defense bar has jumped on that,” Pietrkowski admitted.
So far, 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.
Pietrkowski agrees with some plaintiffs lawyers that it’s likely the Supreme Court will be forced to revisit the issue and provide a more clear-cut ruling.
And more rulings from federal appellate courts will only add fuel to that fire, he said, noting that the U.S. Court of Appeals for the Second Circuit has a number of appeals on the issue pending before it.
“If the Second Circuit would say, for example, all you have to do is deposit that money -- well, that would be a huge change, and could pave the way for the Supreme Court to review the issue,” Pietrkowski said.
According to a Debt Collection Litigation and CFPB (Consumer Financial Protection Bureau) Complaint Statistics Report last month, the number of TCPA lawsuit filings are up nearly 13 percent compared to the same period -- July 1 to July 31 -- last year.
The report, from WebRecon, a Michigan-based company that helps collection agencies segregate debtors with a history of filing lawsuits under TCPA and other federal statutes, also found that, year-to-date, TCPA filings have increased by 43.3 percent.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.