WASHINGTON (1/21/16)--The U.S. Supreme Court ruled Wednesday that companies cannot stop class action lawsuits by offering full relief to individual plaintiffs, according to a report from Law360. The case, Campbell-Ewald Co. v. Gomez, involves an alleged violation of the Telephone Consumer Protection Act (TCPA).
Campbell-Ewald was contracted by the U.S. Navy to develop a multimedia recruiting campaign that included text messages sent to young adults. A subcontractor generated a list of cellular phone numbers for consenting 18- to 24-year-olds, then transmitted the Navy’s message to more than 100,000 recipients.
One person who received the message, Jose Gomez, claimed he did not consent to receive messages and filed a nationwide class action, alleging Campbell-Ewald violated the TCPA.
Campbell-Ewald proposed to settle Gomez’s individual claim, offering him $1,503 per unsolicited text message, then when he refused, claimed his case was moot since he turned down enough relief to make him whole.
TCPA cases have trended this direction in recent years, according to Law360, as its language is unclear and has uncapped damages of $500 to $1,500 per violation. Companies such as Twitter Inc. have been hit with class actions alleging the dissemination of hundreds or even millions of unsolicited calls, faxes or texts.
The companies’ strategy, prior to the Campbell-Ewald Co. v. Gomez decision, had been to offer a settlement to the person who first sued, with hopes that it would end the class action lawsuit.
According to Law360, TCPA litigation has largely been used for plaintiffs to “rack up lofty rewards as well as attorneys’ fees that are not provided for by the statute.”