Professional, Practical Legal Advice Since 1931 Chardon Law Office 440.285.2242
Cleveland Law Office 216.255.5431

Top Court Upholds Spam Text Class Action

Posted On: | Author: | |

by John Liber, Thrasher Dinsmore & Dolan, LPA 2016

Last week, in the case of Campbell-Ewald v. Gomez, the United States Supreme Court released a decision authored by Justice Ruth Bader Ginsburg (Justice Clarence Thomas concurring) affirming the Ninth Circuit (California) Court of Appeals decision addressing the Telephone Consumer Protection Act (TCPA).   The focus of the case was the attempt by the defendant telemarketing company, Campbell-Ewald, to extinguish a class action lawsuit by offering the lead plaintiff, Gomez, the full amount of the damages he would be entitled to individually under the Act.

Utilizing basic contract principles, the Court held, “an unaccepted Rule 68 offer of judgment – for the full amount of the named plaintiff’s individual claim… – does not moot a class action.”

In this case, Jose Gomez filed a class action on behalf of himself and others similarly situated against a contractor of the U.S. Navy who transmitted via text message a recruiting solicitation to 100,000 people.  Gomez claimed that he did not consent to the message, and that this constituted a violation of the TCPA, which prohibits using any automatic dialing system to send a text message to a cellular telephone without the recipient’s prior express consent.  The Act imposes a $500 per message penalty, which may be “trebled” (or multiplied by three), plus attorney’s fees.

The Navy contractor, Campbell-Ewald, while denying liability, made an “offer of judgment” under Federal Civil Rule 68 for $1,503.00 representing what Campbell believed to be the maximum damages to which Gomez was entitled.  When Gomez ignored the offer and the fourteen day timeframe had passed, Campbell first filed a motion to dismiss the case (which was denied), and then later sought summary judgment (which was granted by the district court).  The Ninth Circuit Court of Appeals reversed the district court’s grant of summary judgment, and the Supreme Court affirmed the appellate court’s reversal.

The Supreme Court also addressed the argument that as a contractor for the Navy, Campbell-Ewald was entitled to “derivative sovereign immunity” as if it were a government entity itself.  The Court also rejected this argument, finding that Campbell did not just act as directed by the Navy, but instead violated the directions to send messages only to individuals who had “opted in” to receive solicitations.  “When a contractor violated both federal law and the Government’s explicit instructions, as alleged here, no immunity shields the contractor from suit.”

If you have any questions about issues involving liability under the TCPA, class actions, or other liability issues, feel free to contact John Liber at 440-285-2242.