On Wednesday, the Supreme Court gave an important victory to regular Americans, ruling that companies may not avoid class-action lawsuits by offering to buy off the individual plaintiffs before they can establish a class of similarly harmed people.
The 6-to-3 decision was a surprising break from a long line of extremely pro-business and anti-class-action rulings by the five conservative justices, led by Chief Justice John Roberts Jr.
Class-action suits are a critical type of litigation that allows people with relatively small claims to band together to hold corporations liable for wrongdoing. A single lawsuit by one individual is often not worth a lawyer’s time, even if a company has violated the rights of large numbers of people. That’s why it’s crucial to allow all those harmed to seek the same relief in a single suit.
Obviously, companies want to evade such litigation at all costs, and with the help of sympathetic justices they have devised all sorts of ways to do that. Over the last decade, the court’s conservatives have consistently made it harder for consumers and workers to vindicate their rights, either by increasing the requirements for bringing a class action or by eliminating the option altogether through strict arbitration clauses.
This case, Campbell-Ewald Co. v. Gomez, started in 2006, when Jose Gomez received a text message from Campbell-Ewald, a company the United States Navy had hired to recruit young people who had consented to getting such messages. Mr. Gomez was nearly 40 at the time and had not consented. He sued the company for $1,500 — the maximum remedy under a federal law that protects people against unwanted telephone solicitations. He also began the process of bringing a class-action lawsuit to represent thousands of people who had been sent the same messages without permission.
Rather than fight, Campbell-Ewald offered to pay Mr. Gomez what he asked for, but declined to admit it had broken the law. He refused the money, and proceeded with his class action. The company argued that its offer ended the lawsuit, and thus the basis for a class action, since there was no longer any controversy for a court to rule on.
The Supreme Court disagreed. In an opinion written by Justice Ruth Bader Ginsburg, the court ruled that a plaintiff’s legal claim is not voided if he or she does not accept a defendant’s offer, even if the offer is exactly what the plaintiff requested. “When a plaintiff rejects such an offer — however good the terms — her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief,” Justice Ginsburg wrote.
This was the right outcome. Had the court ruled the other way, it would have allowed companies to make settlement offers just to head off class-action suits — preventing many class actions from ever getting through the courthouse door. Chief Justice Roberts, who was joined in dissent by Justices Antonin Scalia and Samuel Alito Jr., was not concerned with deeply damaging the class-action process. “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,” he wrote. But following that reasoning “would place the defendant in the driver’s seat,” Justice Ginsburg replied, since it costs a company virtually nothing to pay off an individual plaintiff.
The court left open the question of whether a company could still dodge liability by depositing the full amount of a plaintiff’s claim in an account, leading a trial court to rule in favor of the plaintiff. Under the logic of Wednesday’s ruling, the justices should close that loophole when corporations try to exploit it and protect what remains of the class action from the unrelenting efforts of business to undermine it.
http://www.nytimes.com/2016/01/21/o...reme-court-for-class-actions.html?ref=opinion
The 6-to-3 decision was a surprising break from a long line of extremely pro-business and anti-class-action rulings by the five conservative justices, led by Chief Justice John Roberts Jr.
Class-action suits are a critical type of litigation that allows people with relatively small claims to band together to hold corporations liable for wrongdoing. A single lawsuit by one individual is often not worth a lawyer’s time, even if a company has violated the rights of large numbers of people. That’s why it’s crucial to allow all those harmed to seek the same relief in a single suit.
Obviously, companies want to evade such litigation at all costs, and with the help of sympathetic justices they have devised all sorts of ways to do that. Over the last decade, the court’s conservatives have consistently made it harder for consumers and workers to vindicate their rights, either by increasing the requirements for bringing a class action or by eliminating the option altogether through strict arbitration clauses.
This case, Campbell-Ewald Co. v. Gomez, started in 2006, when Jose Gomez received a text message from Campbell-Ewald, a company the United States Navy had hired to recruit young people who had consented to getting such messages. Mr. Gomez was nearly 40 at the time and had not consented. He sued the company for $1,500 — the maximum remedy under a federal law that protects people against unwanted telephone solicitations. He also began the process of bringing a class-action lawsuit to represent thousands of people who had been sent the same messages without permission.
Rather than fight, Campbell-Ewald offered to pay Mr. Gomez what he asked for, but declined to admit it had broken the law. He refused the money, and proceeded with his class action. The company argued that its offer ended the lawsuit, and thus the basis for a class action, since there was no longer any controversy for a court to rule on.
The Supreme Court disagreed. In an opinion written by Justice Ruth Bader Ginsburg, the court ruled that a plaintiff’s legal claim is not voided if he or she does not accept a defendant’s offer, even if the offer is exactly what the plaintiff requested. “When a plaintiff rejects such an offer — however good the terms — her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief,” Justice Ginsburg wrote.
This was the right outcome. Had the court ruled the other way, it would have allowed companies to make settlement offers just to head off class-action suits — preventing many class actions from ever getting through the courthouse door. Chief Justice Roberts, who was joined in dissent by Justices Antonin Scalia and Samuel Alito Jr., was not concerned with deeply damaging the class-action process. “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,” he wrote. But following that reasoning “would place the defendant in the driver’s seat,” Justice Ginsburg replied, since it costs a company virtually nothing to pay off an individual plaintiff.
The court left open the question of whether a company could still dodge liability by depositing the full amount of a plaintiff’s claim in an account, leading a trial court to rule in favor of the plaintiff. Under the logic of Wednesday’s ruling, the justices should close that loophole when corporations try to exploit it and protect what remains of the class action from the unrelenting efforts of business to undermine it.
http://www.nytimes.com/2016/01/21/o...reme-court-for-class-actions.html?ref=opinion
