The Court heard argument Wednesday in Campbell-Ewald v. Gomez. As readers who follow class-action law will know, Campbell-Ewald is one of three potential class-action killers the Court will hear this term (the other two being Spokeo and Tyson). Of the three, it was widely thought, going into argument, that Campbell-Ewald was the one the Court was least likely to bite on, for several reasons.
Campbell-Ewald is about whether a pre-certification offer of complete relief to a named class plaintiff moots out his claims, and thus his as-yet-uncertified class-action. One reason to think that a majority of the Court would never hold that is that, in Genesis Healthcare v. Symczyk, a recent case which the Court took on the assumption that an offer of complete relief to a named plaintiff in a FLSA collective action moots out the named plaintiff's claim, Justice Kagan wrote for four dissenters that the Court never should have taken the case on that assumption because the assumption was laughably wrong. That meant the plaintiffs' bar would need just one more vote to win Campbell-Ewald - though frankly, the same could have been said in Wal-Mart and Comcast, and will be said again in Spokeo and Tyson.
Another reason to think the plaintiffs' bar would prevail is a sense that the class defense bar is asking for too much in Campbell-Ewald - a get-out-of-jail-free card in, at the least, virtually any class action where plaintiffs seek statutory damages, and potentially any class action where a named plaintiff seeks some quantifiable amount of monetary relief. Another reason is that the defendant's arguments in Campbell-Ewald are, by necessity, fairly incoherent, on which more immediately below. Finally, two months ago, the circuit split undergirding the Campbell-Ewald cert grant collapsed when the Seventh Circuit, in an opinion by Judge Easterbrook - no liberal or class-action maven - accepted Justice Kagan's dissent in Genesis in full two months ago and reversed its precedent without even bothering to go en banc.
Then oral argument happened, and it didn't go so well for the plaintiffs' bar, primarily because one of the Genesis dissenters, Justice Breyer, appeared - emphasis on appeared - to be primed to hand a pyrrhic victory to class-action plaintiffs, holding that their claims aren't mooted by an offer of complete relief, but that courts should routinely enter pre-certification judgment in favor of class plaintiffs if they've received tenders of complete relief. Before getting there, some necessary context about the parties' arguments.
The defendant in this case, represented by Gregory Garre, claims that its offer of complete relief to a named plaintiff in a class action under the Telephone Consumer Protection Act (which affords winning plaintiffs capped statutory damages) mooted out the plaintiff's claim. Normally, of course, moot claims are dismissed for lack of jurisdiction. But Garre and the class-defense bar couldn't seriously argue that when a class plaintiff rejects an offer of complete relief, a court should rule that the rejected offer moots the case and dismiss it, leaving the rejecting plaintiff with nothing. So instead, they inventively argue that when a case is mooted by virtue of a rejected offer for complete relief, a court should enter judgment in the amount of the offer. This is inventive because, if a case is moot, a court wouldn't seem to have jurisdiction to enter a money judgment. The plaintiff in this case, represented by Jonathan Mitchell, former SG of Texas, therefore argues that the defendant has conceded away mootness by calling for a judgment - as does the SG's office.
This is a fairly devastating argument, I think, and on Wednesday a number of Justices clearly thought so, but it opens the door to something functionally just as poisonous to class-actions as the defense bar's mootness theory. If entering judgment in favor of a plaintiff who receives an offer of complete relief seems like a sensible enough solution to the problem of offers of complete relief and plaintiffs that refuse to accept them, but mootness is incompatible with that solution, why not just say that courts should routinely enter merits judgments for plaintiffs in the amount of offers for complete relief that they receive without incoherently describing their claims as moot? The only answer is that, in a class case, an offer of complete relief to an individual plaintiff that doesn't also offer class certification and class relief isn't really an offer of complete relief.
As Ronald Mann accurately reports at Scotusblog, on Wednesday Justice Breyer expressed great interest in a proposal in an AFL-CIO amicus brief, on which courts would enter forced judgment in favor of plaintiffs if defendants made a complete tender of relief - not just an offer. (Why exactly the AFL-CIO would ever put such a proposal in a brief that purportedly supports the plaintiff in this case and states it's intended to further the AFL-CIO's interest in the enforcement of labor laws by class-action, I haven't the least idea.) The brief itself says that such a tender would create mootness, but Justice Breyer disavowed that part of their brief, said he was focused on its "practical" import, and asked Mr. Mitchell why courts couldn't, at least, enter forced judgments in favor of plaintiffs upon pre-certification tenders of complete relief. When Mitchell demurred, saying that such tenders wouldn't be complete because they wouldn't contain class certification and relief, Justice Breyer expressed incredulity.
This exchange notwithstanding, I continue to think that the outcome of Campbell-Ewald is in Justice Kennedy's hands. I don't doubt that, when Justice Breyer asked about the AFL-CIO's brief, he sincerely thought the brief had a good idea, or was even right. Of all the Justices, Justice Breyer is the most transparent questioner on the Court - someone who says whatever is on his mind at the moment and invariably engages in a genuine dialogue with the attorneys, instead of using argument as an opportunity to convince his colleagues, speechify, or to perform studied indecision. However, as the Court's most transparent questioner - someone who uses argument to make decisions and shares his spontaneous reactions to argument as it unfolds, rather than unspooling planned lines of attack - he is also at times its most likely to express a view that he later ceases to hold in conference. Of all the Justices on this Court or the Rehnquist Court, I doubt that any have so often used oral argument to float ideas that appear in amicus briefs but never ultimately appear in the opinions of the Court (even those Justice Breyer writes) or to float "practical" solutions that none of the parties want and that likewise never appear in the Court's opinions. I cannot believe that Justice Breyer would vote to let class defendants impose pre-certification forced judgments on class plaintiffs, whether by way of mootness or otherwise. Such a vote would destroy the class-action device in the very cases where it's most useful (though at times most destructive) - low-value statutory damages actions.
So the case is likely in Justice Kennedy's hands, and though Justice Kennedy asked tough questions of both sides, I thought he leaned fairly obviously in favor of the plaintiff. At the very beginning of argument, he told Mr. Garre, "if you want us to write an opinion and say, oh well, a settlement offer is the same as a judgment, that just doesn't equate with the Federal Rules of Civil Procedure or with our cases." Later, in perhaps an even scarier moment for the class-defense bar, Justice Kennedy asked Garre whether a rejected offer of complete relief could be considered as a factor in the certification decision. This, I think, rather clearly presages an opinion where the Court would hold that an offer of complete relief neither moots a case nor requires an entry of forced judgment in favor of plaintiffs, but is some sort of factor in certification that defendants can point to, perhaps with respect to adequacy of representation.
It's true that at the start of Mr. Mitchell's argument, Justice Kennedy asked Mitchell what adversity between the parties remains after an offer of complete relief, and stated that above and beyond past injury-in-fact and redressability, "there has to be adversity" for a court to possess jurisdiction. However, Justice Kennedy held for the Court just two years ago that there doesn't have to be adversity for federal courts to have jurisdiction over a case - in Windsor, where the United States petitioned for cert to seek affirmance of a decision in which they'd lost. There, Justice Kennedy wrote for the Court that adversity is a mere prudential matter of "judicial self-governance," and led the Court to hear Windsor in spite of a lack of adversity in part because Congress defended DOMA. Will Justice Kennedy now hold that as a purely prudential matter of judicial self-governance, courts should zap class-actions that defendants seek to pick off by offering a single named plaintiff a pittance in statutory damages, even though as a functional matter such actions retain all the adversity in the world? (Which is to say, even after an offer of complete relief, litigation between a class representative and a class defendant hardly turns into the "friendly, non-adversary proceeding" Windsor says the prudential adversity requirement is supposed to prevent courts from hearing.) Possible, but unlikely.
Besides promising to be a rare Supreme Court win for the plaintiffs' bar, Campbell-Ewald promises to potentially clarify the extent to which the adversity requirement, which Windsor reclassified as prudential but didn't otherwise shed much light on, really has any bite. It's very difficult to argue that an offer of complete relief for a past violation of some statute has anything to do with mootness in the traditional sense; it doesn't moot out the plaintiff's injury, and it doesn't prevent a court from redressing that injury. What it does is vitiate adversity between the parties; the plaintiff wants a judgment ordering the defendant to pay what the defendant is already willing to pay. A great deal was said on Wednesday about consent judgments and how the fact that courts enter them bears on the status of the adversity requirement. For Mitchell and the SG's office, the fact that courts enter consent judgments after parties settle a case shows that even accepted settlement offers, much less unaccepted ones, don't moot cases or otherwise deprive courts of jurisdiction. Rather, the existence of a settlement is, on this view, a legal reason to enter a merits judgment that mirrors it. Justice Scalia, on the other hand, maintained at argument that settlements do moot cases, that courts nevertheless somehow maintain power to enter consent judgments after settlement, but that courts cannot, after settlement, actively decide the merits of a claim above and beyond entering a judgment reflecting what the parties agreed to.
I think it's clear that Justice Scalia's view isn't very tenable. Either he needs to take the view, recently argued in a paper by Michael Barry, that federal courts just can't enter consent judgments, or he needs to take the view, recently argued in an article by Jim Pfander, that federal courts have what Pfander calls non-contentious jurisdiction. His hybrid view, on which courts lose jurisdiction upon settlement but can nevertheless enter consent judgments, just won't work. One reason it won't work is that it's very well-settled that federal courts can't enter consent judgments on claims as to which they lack subject-matter jurisdiction; to maintain that they can enter consent judgments even though adversity is jurisdictional, one would have to argue that some jurisdictional defects (SMJ) deprive courts of authority to enter even a consent judgment, while others (adversity) don't. The only coherent options are taking adversity very seriously, or not taking it very seriously at all. Currently, doctrine does neither; it acknowledges that courts can enter consent judgments despite a lack of adversity, but doesn't say why, and classifies the adversity requirement as prudential but fails to explain, outside of the exotic context of Windsor, when courts must adhere to it. Should the Court hold in Campbell-Ewald that a rejected offer of complete relief doesn't deprive courts of power, jurisdictionally or prudentially, to decide a case's merits, even if only by way of entering a judgment in the form of the offer of complete relief, that would go a long way towards clarifying that the adversity requirement isn't much of a requirement at all.