Last week, the US Supreme Court ruled that an offer of judgment under Federal Rule of Civil Procedure 68 made to the lead plaintiff in a class action lawsuit, in addition to a separate free-standing settlement offer in the same amount, does not render the lawsuit moot.

In Campbell-Ewald Co. v. Gomez, No. 14-857, 2016 WL 228345 (U.S. Jan. 20, 2016), Jose Gomez filed a class-action lawsuit seeking damages under the Telephone Consumer Protection Act as a result of unwanted text messages he and others received from Campbell-Ewald Company.  Before Gomez had filed his motion for class certification, Campbell made an offer of judgment to him under Federal Rule of Civil Procedure 68 which would have satisfied his personal claim entirely.  Gomez allowed this offer to lapse after 14 days, as specified by the rule.  Campbell then moved to dismiss the case, claiming that no controversy remained after its offer provided Gomez with complete relief.  Both the District Court and the Ninth Circuit Court of Appeals disagreed with Campbell.
Continue Reading Supreme Court Says Offering to Settle Cannot Moot Class Action Suits

The Seventh Circuit has struck down a common feature of preliminary approval orders of federal class action settlements. The Seventh Circuit held that a federal court may not preliminarily enjoin class members from prosecuting related state lawsuits while the court decides whether to give final approval to the class settlement.  Adkins v. Nestlé Purina PetCare Co., No. 14-3436, 2015 WL 864931 (7th Cir. Mar. 2, 2015).

These types of preliminary injunctions are commonly used in a broad range of consumer and other class settlements, and they are particularly important when a defendant is facing several competing class actions on the same issue.  But the Seventh Circuit held that these injunctions violate the Anti-Injunction Act, 28 U.S.C. § 2283—even though the court acknowledged that federal settlements “may well collapse” if state actions go to judgment before federal courts can approve the settlements.    
Continue Reading Seventh Circuit Guts Important Tool for Resolving Federal Class Actions