Distribution, Competition, and Antitrust / IP Law

An Unaccepted Offer of Judgment Won’t Moot a (Class) Claim

In Campbell-Ewald Co. v. Gomez, 577 U.S. ___ (2016), the Supreme Court held that an unaccepted offer of judgment under Federal Rule of Civil Procedure 68 does not moot a named plaintiff’s claim, and, therefore, the named plaintiff can still seek class certification.

The case involves text messages allegedly sent without consumers’ consent in violation of the Telephone Consumer Protection Act. Prior to class certification, the defendant offered judgment in the form of the named plaintiff’s full alleged damages and costs as well as an injunction against the defendant’s involvement in unsolicited text messaging. (The Act does not provide for attorney’s fees.) The plaintiff rejected the offer.

Applying “basic principles of contract law,” the Court (Ginsburg, J.) held that the defendant’s offer of judgment, once rejected, had no continuing efficacy. The parties therefore remained adverse.   Further, a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted. The Court did 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 plaintiff and the court then enters judgment for the plaintiff in that amount.

Justice Thomas concurred in the judgment but would have rested on the common-law history of “tenders.” Chief Justice Roberts dissented, emphasizing that the federal courts must independently evaluate whether there is a live case or controversy. “[A] plaintiff is not the judge of whether federal litigation is necessary, and a mere desire that there be federal litigation – for whatever reason – does not make it necessary.” (Emphasis in original.) Under constitutional principles, “[t]he agreement of the plaintiff is not required to moot a case.” “If the defendant is willing to give the plaintiff everything he asks for, there is no case or controversy to adjudicate, and the lawsuit is moot.”  Chief Justice Roberts also noted that Gomez did not have standing to seek relief based solely on the alleged injuries of others, and Gomez’s interest in sharing attorney’s fees among class members or in obtaining a class incentive award does not create Article III standing.

Although the Supreme Court has in recent years been tightening up the standards for class certification, see, e.g., Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013), Gomez is evidence that the Court will not automatically approve arguments that limit the ability of plaintiffs to seek class certification.

Twombly’s Teeth

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Obama Antitrust Not Much More Aggressive Than Bush?

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Marginal Evidence of Customer Diversion Won’t Support a Price Discrimination Claim

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Are Mutual Index Funds Anti-Competitive?

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Milk expiration dates and clever cartels

The Planet Money podcast this week has a story about the Greek economy.  According to the podcast, there is a Greek milk producer "cartel."  Of course cartels are unlawful in Europe, just as they are in the U.S.  So it seems that Greek milk producers … [Continue reading]

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