Supreme Court rules compensation offers do not end class action suits

[JURIST] The US Supreme Court [official website] ruled [opinion, PDF] Wednesday in Campbell-Ewald Company v. Gomez [SCOTUSblog backgrounder] that an unaccepted settlement offer to a lead plaintiff in a class action lawsuit does not end the legal challenge. The class action suit dealt with unsolicited text messages sent from the Campbell-Ewald Company that allegedly violated the Telephone Consumer Protection Act [text]. Lead plaintiff Jose Gomez initiated the class action suit against Campbell-Ewald and initially received a settlement offer of $1,503 in damages for each unauthorized text. Gomez did not take the offer and the US District Court hearing the suit dismissed the claim due to the rejection of the settlement. The case was then reversed at the appellate level and eventually taken up by the Supreme Court. In a 6-3 decision, the court held that "[a]n unaccepted settlement offer, like other unaccepted contract offers, creates no lasting right or obligation." The class action suit has been remanded to the lower court to continue proceedings.

The case is a significant setback for large companies looking to avoid liability in class action suits. Had the court ruled the other way, businesses could have been allowed to pre-empt costly class action suits by offering the lead plaintiff everything to which he would have been entitled in order to eliminate the suit's viability. The court heard oral arguments in the case in October after granting certiorari [JURIST reports] in May.

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