It is common for parties involved in a lawsuit, especially a large class action, to settle their legal claims outside of court, instead of pursuing the dispute all the way to a court ruling. But just because one party makes an offer, does not mean the other party is required to accept that offer. Each side will agree to or reject an offer to settle the dispute based on a number of factors, of which the amount of the settlement is just one.
In some cases involving statutory damages, such as allegations of violating the Telephone Consumer Protection Act (TCPA), if a defendant offers to pay the lead plaintiff all actual and statutory damages in full, the plaintiff’s claims are considered null and void, regardless of whether the plaintiff accepts the terms of the settlement. This allows defendants to avoid a large and costly class action lawsuit by paying off the claims of just one plaintiff. But that recently changed with a ruling by the Supreme Court.
Campbell-Ewals allegedly subcontracted MindMatic LLC to send naval recruitment messages to approximately 100,000 people. The messages allegedly violated the TCPA, which prohibits companies from contacting consumers on their cell phones in a non-emergency situation without the express consent of the consumer. The Act was put in place when cell phones began to replace landlines and people were made to pay for the phone calls and text messages they received, as well as the ones they made.
The TCPA provides a statutory payment of $500 for each violation of the Act.
Jose G. is a named plaintiff in the class action lawsuit filed against Campbell-Ewald for allegedly violating the TCPA. The company offered Gomez $1,503 for each unsolicited text message he received, but Gomez refused to take the settlement and decided instead to continue pursuing his claims and the claims of the rest of the class in court. Campbell-Ewald petitioned the court to dismiss Gomez’s case, saying their offer of such a substantial settlement rendered his claims moot, but the U.S. Supreme Court disagreed.
In its majority opinion, the court wrote that an unaccepted settlement offer has the same ability to bind the parties as any other unaccepted contract offer: which is to say none. An offer that has not been accepted has the same legal effect on both parties as if no offer had been made at all.
The Supreme Court also made a distinction between offering to pay a plaintiff’s damages and actual putting up the money. Had Campbell-Ewald deposited money in an account to be paid to the plaintiff, the ruling may have been different.
Now that the Supreme Court has weighed in on the issue, it’s likely the ability of defendants involved in TCPA lawsuits across the country to render class action claims moot by offering large settlements to individual class members has been permanently affected. It is entirely possible that, from now on, lead plaintiffs will have the opportunity to reject large individual settlements in order to continue representing the interests of the entire class in a court of law. Defendants will also still not give up on this tactic and simply try to pay money to the class representative to try to moot an individual claim so they can attempt to avoid class wide liability.
Our Arlington Heights, Illinois consumer rights private law firm handles individual and class action gift card, data breach, privacy rights, deceptive advertising, predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. The Chicago consumer lawyers at DiTommaso Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.
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