Class action lawsuits are often the solution to this problem. If the company cheats you and you alone out of a few hundred dollars, you’re probably out of luck. But if the same company illegally cheats thousands of people out of a few hundred dollars as part of the same scheme, class actions allow those thousands of people to join together in one grand lawsuit. Because their combined suit is now worth a lot of money, they are suddenly likely to be able to recruit excellent legal counsel to represent the class.
Campbell-Ewald Company v. Gomez, a case the Supreme Court will hear on Wednesday, could deal a mortal blow to class action litigation, however. Indeed, if the defendant in Campbell-Ewald prevails, companies that engage in multi-million dollar lawbreaking could gain the power to shut down class action litigation altogether by paying out a tiny fraction of what they should owe.
Typically, class action lawsuits are brought by a “named plaintiff” — often a single individual who alleges an injury that is similar to the injury experienced by all of the other members of the class. Campbell-Ewald involves a government contractor that allegedly violated a federal law prohibiting automated unsolicited text messages. The named plaintiff is Jose Gomez, a man who received one of these messages.
Gomez filed a complaint indicating that he was suing on behalf of himself and all the other individuals who received these unwanted text messages. Then, in an apparent attempt to cut off this class action litigation before it could begin, the contractor offered Gomez — and only Gomez — a settlement offer. Campbell-Ewald would pay Gomez three times what his individual claim is worth (the company’s offer was $1,500 per unwanted text message received by Gomez) in order to make this lawsuit go away.
Now, however, Campbell-Ewald claims that Gomez was effectively obligated to take this offer because it offered him complete relief for claim — even though the company offered no relief to anyone else in the class. In effect, they ask the Supreme Court to bless a rule that would allow class action defendants to shut down class action lawsuits by paying off named plaintiffs and offering nothing to anyone else. That could lead to many or even most class action lawsuits being shut down, since the cost of settling with a single plaintiff is often peanuts compared to the cost of the class action suit as a whole.
In their brief, Campbell-Ewald’s attorneys rely on a very fine distinction to justify this proposed rule. Though Gomez indicated in his initial legal filing that he was bringing this lawsuit as a class action, courts generally must hold a separate proceeding to “certify” a class before class action litigation can proceed This is a necessary process to answer questions such as whether the members of the class actually share common claims and whether the named plaintiff is actually representative of the class. Motions asking a court to certify a class are typically hotly contested and may be litigated for months or even years before a class is eventually certified.
Campbell-Ewald’s attorneys claim that a “class only acquires a separate legal status if and when the class has been certified by the district court.” In effect, they claim that they have the right to buy off the named plaintiff and shut down a class action until the moment when a class is certified. A class action defendant could wait until a judge is about to rule on the class action certification and then, if they think that the judge is about to rule against them, buy off the named plaintiff and walk away.
There are two reasons to believe that the Roberts Court is likely to use this case as a vehicle to undermine class actions. The first is that they’ve shown a willingness to do so in the past. In the 2011 decision AT&T Mobility v. Concepcion, for example, a 5-4 Court gave companies the power to force consumers to sign away their right to bring a class action as a condition of doing business with the company. Concepcion was an oddly reasoned decision that relied on an irrelevant statute which makes no mention of class actions, so, if nothing else, it demonstrates the Court’s willingness to be flexible with the law in this space.
A second reason why class action plaintiffs should be concerned about Campbell-Ewald is that the facts of this case, frankly, are not particularly compelling. Campbell-Ewald is a military contractor. The unsolicited text messages at issue in this case were Navy recruiting texts. And, while federal law permits people who illegally receive unsolicited text messages to collect $500 per violation, the actual cost of receiving an unwanted text message is negligible. The conservative Roberts Court, in other words, is likely to agree with Campbell-Ewald’s attorneys that this particular case is nothing more than an effort by plaintiffs lawyers to squeeze money out of a company that, at most, committed a minor violation of the law.
If the justices want to shut down this particular case without doing greater harm to the class action lawsuit, there is a way that they could do so. Should they hand down a sweeping ruling allowing class action defendants to effectively pick off named plaintiffs, however, that ruling will benefit companies that commit much more serious violations of the law and harm workers and consumers who have experienced far more serious injury.
Original Article
Source: thinkprogress.org/
Author: Ian Millhiser
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