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Supreme Court decision on unsolicited texts could impact class actions

Posted On: Oct. 20, 2015 12:00 AM CST

U.S. Supreme Court oral arguments last week over the issue of an unsolicited text message has left experts unsure of how the court is likely to rule in a case that could have a significant impact on business' success in handling class action litigation.

Jose Gomez received an unsolicited text message May 2006 from marketing company Campbell-Ewald Co., which had a contract with the Navy, urging his enlistment into the service, according to court papers in Jose Gomez v. Campbell-Ewald Co. Inc.

He filed suit against Detroit-based Campbell-Ewald in U.S. District Court in Pasadena, California, in 2010, charging the firm had violated the Telephone Consumer Protection Act by sending the unsolicited message. His lawsuit sought class action status. Campbell-Ewald offered Mr. Gomez $1,503 per violation, plus reasonable costs, to settle the case, but he rejected the offer by allowing it to lapse.

Campbell-Ewald then moved to dismiss the case, arguing that Mr. Gomez' rejection of the offer mooted both the personal and putative class actions. In September 2014, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco overturned a lower court ruling and held that neither the individual nor the class claims were mooted when Mr. Gomez rejected the settlement. Campbell-Ewald then appealed the case to the U.S. Supreme Court.

“Neutralizing” litigation before it becomes a class action is one of the defense strategies used by defense counsel, said Joshua D. Rogaczewski, a partner with McDermott Will & Emery in Washington, D.C.

Experts say a ruling in Ewald-Campbell's favor would make it easier for business to avoid putative class action claim, by “picking off” lead plaintiffs by offering them “full relief.”

If Campbell-Ewald prevails, “plaintiffs' counsel would by necessity be put in position of having to essentially constantly go out and find new named plaintiffs,” said Sylvia Rivera, a partner with Morrison Foerster L.L.P. in Los Angeles. In these cases “plaintiff lawyers don't necessarily have any idea” regarding who potential class members are, and how to contact them, she said.

Based on the questioning during the oral arguments, it is unclear how the case is likely to rule, say attendees. Justices Anthony M. Kennedy or Stephen G. Breyer could be swing votes in the case, said Richard Samp, lead counsel at the Washington-based Washington Legal Foundation. “It will be close” and could go either way, he said.

Mr. Rogaczewski said a ruling in the case can be expected as soon as December, 2015 or January, 2016.