- Does a claim become moot when the plaintiff receives an offer of complete relief; and does the answer change if that plaintiff purports to represent an uncertified class?
- Does the doctrine of derivative sovereign immunity extend generally to government contractors acting within the scope of their contract, or is it limited to claims of property damage related to public works projects?
This case presents two issues. First, the Supreme Court will determine whether a case is moot when a plaintiff receives an offer of complete relief for his claims, even if one of the plaintiff’s claims was made on behalf of an uncertified class of litigants. If the case is not moot, the Court will consider whether the doctrine of derivative sovereign immunity for government contractors is restricted to claims arising out of property damage caused by public works projects or is applicable in other cases. Government contractor Campbell-Ewald argues that an offer of complete relief renders the plaintiff’s individual and class claims moot. But the plaintiff, Jose Gomez, contends that an unaccepted offer does not moot a claim. Additionally, Campbell-Ewald argues that it qualifies for derivative sovereign immunity. However, Gomez argues that only contractors working on public works projects are entitled to such immunity. This case may affect the viability of class action lawsuits, and may define the scope of derivative sovereign immunity.
Questions as Framed for the Court by the Parties
- Does a case become moot, and thus beyond the judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim?
- Is the answer to the first question any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified?
- Is the doctrine of derivative sovereign immunity recognized in Yearsley v. W.A. Ross Construction Co., 309 U.S. 18 (1940), for government contractors, restricted to claims arising out of property damage caused by public works projects?
In 2005, the U.S. Navy contracted Campbell-Ewald Co. to provide the Navy advertising services. As part of these services, Campbell-Ewald subcontracted MindMatics, LLC (“MindMatics”) to implement a text messaging campaign, which targeted recipients between the ages of 18 and 24. MindMatics compiled a list of over three million people who had “opted” to receive messages from the Navy and sent out over 100,000 recruiting text messages around May 2006. Respondent Jose Gomez was among the people who received one of these messages, but he claims to have never consented to receiving them.
Gomez filed a class action complaint against Campbell-Ewald in the United States District Court for the Central District of California seeking relief under the Telephone Consumer Protection Act of 1991 (“TCPA”).The TCPA broadly restricts telephone solicitations, including automated systems that use text messages and prerecorded voice messages. After Campbell-Ewald filed its answer to Gomez’s complaint, but before Gomez’s class was certified, Campbell-Ewald offered to settle with Gomez for $1,503. Gomez declined the relief. Subsequently, Campbell-Ewald sought to dismiss the action as moot based on its offer of judgment and settlement, but the District Court denied the motion.
Campbell-Ewald then moved for summary judgment on the grounds of derivative sovereign immunity. Generally, the doctrine of sovereign immunity grants government entities, such as the Navy, immunity from tort liability arising from their own activity (such as liabilities arising under the TCPA). The District Court granted the motion, finding that Campbell-Ewald was acting on behalf of the United States Navy, and as such, was entitled to the same immunity from tort liability that the federal government enjoys. Gomez appealed. The Ninth Circuit Court of Appeals reversed the District Court’s summary judgment, and remanded for further proceedings. The Ninth Circuit concluded that an “unaccepted” offer of relief did not moot Gomez’s claim, and that derivative sovereign immunity was a narrow defense and rarely applicable.
In this case, the Supreme Court will decide whether a defendant’s offer of complete relief moots a plaintiff’s individual and Rule 23 class-action claims and thereby eliminates Article III standing. Assuming that Article III jurisdiction exists, the Court will decide whether an independent contractor may receive derivative sovereign immunity for injuries beyond property damage arising from public works projects. Campbell-Ewald argues that an offer of complete relief mooted Gomez’s individual claim and class-action claim, thereby eliminating the case or controversy needed for Article III jurisdiction. Gomez counters that an offer for complete relief is non-binding, and does not eliminate Article III jurisdiction because the court may enter judgment for the plaintiff after a defendant’s offer.
Assuming (without conceding) that jurisdiction exists, Campbell-Ewald maintains that, because it was working under contract for the Navy, it qualifies for derivative sovereign immunity. Gomez counters that Campbell-Ewald does not qualify for derivative sovereign immunity, because it violated the terms of its contract or, in the alternative, federal law.
DOES AN OFFER OF COMPLETE RELIEF RENDER GOMEZ’S CLAIM MOOT?
Campbell-Ewald argues that an offer of complete relief renders Gomez’s claim moot, eliminating Article III jurisdiction--there is no longer a controversy to resolve, and Gomez no longer possesses an adequate personal stake in the case’s outcome. Campbell-Ewald explains that plaintiffs cannot preserve Article III jurisdiction by refusing the offer, because the question of whether jurisdiction exists is independent of the parties’ interests or desires and is determined wholly by a court. Campbell-Ewald contends that the Court must look to whether a defendant’s offer would provide the plaintiff with complete relief and dismiss the case as moot if it would. Campbell-Ewald notes that courts, upon a finding of mootness, may enter judgment according to terms of the offer. Campbell-Ewald contends that the courts’ long-standing power to enter judgment in moot cases supports the notion that any genuine controversy in the case has ended. The Ninth Circuit held a case is moot only when the court cannot grant effectual relief, but Campbell-Ewald contends that its offer made it impossible for a court to grant effectual relief to Gomez, because any award that a court could grant Gomez would not exceeded what Campbell-Ewald already offered. Moreover, Campbell-Ewald contends that the Ninth Circuit’s use of effectual-relief language is not a limitation on mootness, because it is just another way of measuring mootness.
Gomez counters that courts do not lose Article III jurisdiction if a defendant makes, but the plaintiff does not accept, an offer of complete relief, because the elements of an Article III case or controversy remain. Gomez argues that Campbell-Ewalds’ offer does not affect the Court’s Article III jurisdictional requirements: “injury-in-fact, causation, and redressability” of the injury. Gomez contends that the court could still redress the plaintiff’s injury, even with an offer of complete relief, therefore rendering it justiciable. Additionally, Gomez argues that because an offer is not legally binding, further adjudication would affect the result of the case by creating a legally enforceable judgment. Gomez asserts that because mootness means a court may not enter judgment, and because here the court could enter judgment after an offer of relief, the plaintiff’s Article III standing remains. Gomez argues that, by acknowledging that a court may enter judgment after a defendant’s offer of complete relief, Campbell-Ewald has conceded that the plaintiff’s case is not moot.
DOES AN OFFER OF COMPLETE RELIEF RENDER A CLASS CLAIM MOOT?
Campbell-Ewald contends that a plaintiff’s class-action claim becomes moot with his or her individual claim when the class has not been certified. Campbell-Ewald argues that the plaintiff no longer has a right to a Rule 23 class-action claim, because the plaintiff no longer has an interest in the case’s outcome. Campbell-Ewald further contends that the plaintiff’s class claim does not fall into one of the limited exceptions that allow a class certification to relate back to the filing of the complaint. Specifically, Campbell-Ewald argues that, in this case, the plaintiff’s claim is not inherently transitory (meaning that the plaintiff’s personal stake would not last through the entire litigation), nor is the plaintiff appealing a denial of a motion to certify the class.
Gomez asserts that a plaintiff maintains financial interest in class certification regardless of an individual claim’s mootness. In support, Gomez argues that class certification allows plaintiffs to share attorney’s fees amongst each other and obtain an incentive award upon the case’s settlement.Moreover, Gomez disagrees with Campbell-Ewald’s interpretation of the holding in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), which denied a collective action after the plaintiff’s Fair Labor Standards Act claim became moot. Gomez argues that a collective action is subject to different treatment than a Rule 23 class action, particularly if the plaintiff has a financial stake in a class-certification decision.
DOES AN INDEPENDENT CONTRACTOR WORKING FOR A GOVERNMENT ENTITY QUALIFY FOR DERIVATIVE SOVEREIGN IMMUNITY?
Campbell-Ewald contends that the Ninth Circuit erred in ruling that derivative sovereign immunity does not protect it from liability, and that derivative sovereign immunity is limited to actions against contractors working on government public works projects. Campbell-Ewald argues that, because immunity shields the government from damages unless Congress waives its immunity, a private contractor must in turn receive immunity when working under a constitutionally valid authorization by the government and under the government’s supervision. Campbell-Ewald explains that there is no indication that Congress intended to abrogate government immunity under the TCPA; therefore, Campbell-Ewald contends that it should also be granted immunity because their work is within the general scope of the contract.
Gomez maintains that derivative sovereign immunity cannot extend to actions that are in violation of a federal statute. Gomez argues that a federal contractor should not be shielded from liability if it violates a federal statute, since the Court’s precedent establishes that government officials cannot be authorized to violate federal law. Gomez also argues that those who violate the government’s contractual authorization would not qualify for derivative sovereign immunity. Gomez disagrees with Campbell-Ewald’s assertion that derivative sovereign immunity is available to contractors for contract violations, so long as their actions are within the contract’s general scope. By acknowledging a contract violation, Gomez contends that Campbell-Ewald cannot receive derivative sovereign immunity, because a contractor that violates a government authorization is not actually working on the government’s behalf.
In this case, the Supreme Court will examine whether individual and uncertified class claims are rendered moot when an offer of full relief is made. The Court will also determine whether the doctrine of derivative sovereign immunity applies to this case. Campbell-Ewald argues that an offer of full relief eliminates the “controversy” necessary for a claim to be heard in federal court under Article III, section 2 of the U.S. Constitution. Moreover, Campbell-Ewald asserts that it was acting within the general scope of its contract with the Navy, and should be eligible for protection under sovereign immunity. But Gomez maintains that an offer of full relief does not resolve the entire controversy, especially with regards to class action lawsuits, and that Campbell-Ewald is not entitled to sovereign immunity because Campbell-Ewald’s violation of the TCPA was not part of its contract with the Navy. The Court’s decision may have a substantial impact on class action lawsuits, as well as the doctrine of derivative sovereign immunity.
OFFERS OF RELIEF AND CLASS ACTION
In support of Campbell-Ewald, amicus curiae TransUnion LLC argues that allowing an offer of complete relief to moot a plaintiff’s claim encourages the prompt resolution of cases. . TransUnion argues that “there is nothing untoward” about applying mootness principles “following a bona fide Rule 68 offer of judgment” to the representative of an uncertified class, given that Rule 23’s class-action mechanism is a procedural device and not an individual’s substantive right. Moreover, TransUnion contends that “recognizing that Rule 68 offers can moot class claims does nothing to deter individual claimants from obtaining relief to which they are entitled,” because only a full offer of judgment can moot a claim, and full offers do not preclude claims of other claims if made precertification. The U.S. Chamber of Commerce and Business Roundtable suggest that allowing plaintiffs’ claims to go forward when full relief has been offered would incentivize “gamesmanship,” in which plaintiffs’ attorneys might advise their clients not to select full settlement offers in order to preserve claims.
But the Constitutional Accountability Center (“CAC”), supporting Gomez, argues that allowing unaccepted offers of full relief to moot class action claims would undermine the purpose of class action lawsuits. . The CAC explains that class action lawsuits allow for the aggregation of numerous smaller claims (each claim on its own not economically viable) into one large claim. The CAC contends that absent members of an uncertified class may never gain relief if an offer of judgment and settlement were permitted to moot a named plaintiff’s claim. Further, the CAC maintains that successive suits brought by individual plaintiffs who are likely to obtain relief would be a serious drain on judicial resources. Additionally, Public Justice, the AARP Foundation, and National Right to Work Legal Defense Foundation (“NRTW”) argue that permitting defendants to moot claims through offers of complete relief to named plaintiffs would create an unacceptable tension between the named plaintiff and absent class members. Specifically, the NRTW contends that the named class member has a fiduciary duty to absent class members to proceed with the claim prior to class certification, as the recovery of the absent class is largely dependent on the named plaintiff advancing the claim.
THE LIMITS OF DERIVATIVE SOVEREIGN IMMUNITY
KBR, Inc. (“KBR”), in support of Campbell-Ewald, argues that the principle of derivative sovereign immunity should not be “wooden[ly]” constrained to certain fact patterns, because Court precedent is applied across a range of fact patterns. KBR states that the Ninth Circuit expressed concerns about whether government contractors could be held accountable if derivative sovereign immunity was applied broadly. But KBR maintains that applying derivative sovereign immunity in this case would not encourage contractors to act recklessly because the government can closely monitor and police contractors’ conduct.
The United States agrees with the Ninth Circuit that derivative sovereign immunity should be narrowly applied, such as in cases involving takings. In support, Gomez contends that the lack of derivative sovereign immunity for government contractors will not dissuade contractors from taking government contracts, as they can always insist on an indemnification clause, just like in any other contract.
The Supreme Court will determine whether an offer of complete relief moots a plaintiff’s individual and class claim, and whether the doctrine of derivative sovereign immunity for independent government contractors is restricted to claims of property damage arising from public works projects. Campbell-Ewald argues that an offer of complete relief moots a plaintiff’s individual and class claim. Additionally, Campbell-Ewald argues that it qualifies for derivative sovereign immunity, because it was working under contract with the Navy, a government entity. On the other hand, Respondent Jose Gomez argues that an unaccepted offer of complete relief does not moot a case. Moreover, Gomez argues that only contractors working on public works projects are entitled to derivative immunity, and that derivative immunity cannot extend to violations of contracts and federal statutes. The court’s ruling may affect the viability of class action lawsuits, as well as the scope of the doctrine of derivative sovereign immunity.
- Lawrence Hurley, U.S. Top Court Agrees to Weigh U.S. Navy Text Message Lawsuit, Reuters (May 18, 2015).