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Court offers plan to curb class actions

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In a rare move, a U.S. Supreme Court ruling has provided businesses with a possible roadmap to help them win dismissal of many class-action lawsuits that business would do well to consider.

As we report on page 3, the high court's 6-3 ruling in Campbell-Ewald Co. v. Jose Gomez stems from an unsolicited recruitment text message sent on the Navy's behalf. The plaintiff in the case, who was outside of the age group targeted by the Navy for recruitment, sued alleging violation of the Telephone Consumer Protection Act.

In her Jan. 20 majority ruling in favor of the plaintiff, Justice Ruth Bader Ginsburg points out that a settlement offer to Mr. Gomez had not been accepted, it had just been allowed to lapse. As a result, there was still an unresolved dispute between the parties and the case could not be dismissed.

But in a not-so-subtle hint as to how the defense bar should act in future, Justice Ginsburg said that “we need not, and do not, now decide whether results would be different” if the texting company had deposited Mr. Gomez's claim in an account payable to him and the court had entered a judgment for him in that amount

“That question is appropriate for a case in which it is not hypothetical,” said Justice Ginsburg.

And indications are the dissenting justices in the case, who are already sympathetic to businesses, would go along with this approach.

Attorneys say that while it may take a year or two to reach the high court, a case such as Justice Ginsburg seems to solicit is likely to find a sympathetic audience.

Experts point out that while plaintiffs in Telephone Consumer Protection Act and Fair Labor Standards Act class actions, in particular, may receive small amounts in settlements, it is the plaintiffs' bar that can rack up millions in legal fees for relatively little work.

Sometimes, the plaintiffs' bar can find only a single plaintiff willing to attach his or her name to these often-frivolous cases. By following Justice Ginsburg's suggestion, companies may at the very least make life more difficult for these plaintiff attorneys.

Yes, these unsolicited texts and phone calls, which seem to always come during dinner time, are pretty annoying. But all these cases do, really, is enrich the plaintiffs' bar.

And pursuing this strategy means business may not only save on legal fees but also may have the satisfaction of knowing they helped clear courts' dockets, leaving the judiciary freer to focus on more urgent issues.