Campbell-Ewald Co. v. Gomez

• Decision Date: 20 January 2016
• Docket Number: No. 14–857.,14–857.
• Citation: 193 L.Ed.2d 571,577 U.S. 153,136 S.Ct. 663
• Parties: CAMPBELL–EWALD COMPANY, Petitioner v. Jose GOMEZ.
• Court: U.S. Supreme Court

577 U.S. 153

136 S.Ct. 663

193 L.Ed.2d 571

CAMPBELL–EWALD COMPANY, Petitioner

v.Jose GOMEZ.

No. 14–857.

Supreme Court of the United States

Argued Oct. 14, 2015.

Decided Jan. 20, 2016.

As Revised Feb. 9, 2016.

Gregory G. Garre, Washington, DC, for petitioner.

Jonathan F. Mitchell, for respondent.

Anthony A. Yang, for the United States as amicus curiae, by special leave of the Court, supporting the respondent.

Laura A. Wytsma, Meredith J. Siller, Loeb & Loeb LLP, Los Angeles, CA, Gregory G. Garre, Melissa Arbus Sherry, Michael E. Bern, Nicole Ries Fox, Latham & Watkins LLP, Washington, DC, for petitioner.

Myles McGuire, Evan M. Meyers, McGuire Law, P.C., Chicago, IL, Michael J. McMorrow, McMorrow Law, P.C., Chicago, IL, Jonathan F. Mitchell, Stanford, CA, Scott L. Nelson, Public Citizen, Litigation Group, Washington, DC, David C. Parisi, Suzanne Havens Beckman, Parisi & Havens LLP, Santa Monica, CA, for respondent.

Justice GINSBURG delivered the opinion of the Court.

Is an unaccepted offer to satisfy the named plaintiff's individual claim sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated? This question, on which Courts of Appeals have divided, was reserved in Genesis Healthcare Corp. v. Symczyk, 569 U.S. ––––, ––––, ––––, n. 4, 133 S.Ct. 1523, 1528, 1529, n. 4, 185 L.Ed.2d 636 (2013). We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant's continuing denial of liability, adversity between the parties persists.

This case presents a second question. The claim in suit concerns performance of the petitioner's contract with the Federal Government. Does the sovereign's immunity from suit shield the petitioner, a private enterprise, as well? We hold that the petitioner's status as a Government contractor does not entitle it to "derivative sovereign immunity," i.e., the blanket immunity enjoyed by the sovereign.

I

The Telephone Consumer Protection Act (TCPA or Act) 48 Stat. 1064, 47 U.S.C. § 227(b)(1)(A)(iii), prohibits any person, absent the prior express consent of a telephone-call recipient, from "mak[ing] any call ... using any automatic telephone dialing system ... to any telephone number assigned to a paging service [or] cellular telephone service." A text message to a cellular telephone, it is undisputed, qualifies as a "call" within the compass of § 227(b)(1)(A)(iii). 768 F.3d 871, 874 (C.A.9 2014). For damages occasioned by conduct violating the TCPA, § 227(b)(3) authorizes a private right of action. A plaintiff successful in such an action may recover her "actual monetary loss" or $500 for each violation, "whichever is greater." Damages may be trebled if "the defendant willfully or knowingly violated" the Act.

Petitioner Campbell–Ewald Company (Campbell) is a nationwide advertising and marketing communications agency. Beginning in 2000, the United States Navy engaged Campbell to develop and execute a multimedia recruiting campaign. In 2005 and 2006, Campbell proposed to the Navy a campaign involving text messages sent to young adults, the Navy's target audience, encouraging them to learn more about the Navy. The Navy approved Campbell's proposal, conditioned on sending the messages only to individuals who had "opted in" to receipt of marketing solicitations on topics that included service in the Navy. App. 42. In final form, the message read:

" Destined for something big? Do it in the Navy. Get a career. An education. And a chance to serve a greater cause. For a FREE Navy video call [phone number]." 768 F.3d, at 873.

Campbell then contracted with Mindmatics LLC, which generated a list of cellular phone numbers geared to the Navy's target audience—namely, cellular phone users between the ages of 18 and 24 who had consented to receiving solicitations by text message. In May 2006, Mindmatics transmitted the Navy's message to over 100,000 recipients.

Respondent Jose Gomez was a recipient of the Navy's recruiting message. Alleging that he had never consented to receiving the message, that his age was nearly 40, and that Campbell had violated the TCPA by sending the message (and perhaps others like it), Gomez filed a class-action complaint in the District Court for the Central District of California in 2010. On behalf of a nationwide class of individuals who had received, but had not consented to receipt of, the text message, Gomez sought treble statutory damages, costs, and attorney's fees, also an injunction against Campbell's involvement in unsolicited messaging. App. 16–24.

Prior to the agreed-upon deadline for Gomez to file a motion for class certification, Campbell proposed to settle Gomez's individual claim and filed an offer of judgment pursuant to Federal Rule of Civil Procedure 68. App. to Pet. for Cert. 52a–61a.¹ Campbell offered to pay Gomez his costs, excluding attorney's fees, and $1,503 per message for the May 2006 text message and any other text message Gomez could show he had received, thereby satisfying his personal treble-damages claim. Id., at 53a. Campbell also proposed a stipulated injunction in which it agreed to be barred from sending text messages in violation of the TCPA. The proposed injunction, however, denied liability and the allegations made in the complaint, and disclaimed the existence of grounds for the imposition of an injunction. Id ., at 56a. The settlement offer did not include attorney's fees, Campbell observed, because the TCPA does not provide for an attorney's-fee award. Id., at 53a. Gomez did not accept the settlement offer and allowed Campbell's Rule 68 submission to lapse after the time, 14 days, specified in the Rule.

Campbell thereafter moved to dismiss the case pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. No Article III case or controversy remained, Campbell urged, because its offer mooted Gomez's individual claim by providing him with complete relief. Gomez had not moved for class certification before his claim became moot, Campbell added, so the putative class claims also became moot. The District Court denied Campbell's motion. 805 F.Supp.2d 923 (C.D.Cal.2011).² Gomez was not dilatory in filing his certification request, the District Court determined; consequently, the court noted, the class claims would "relat[e] back" to the date Gomez filed the complaint. Id., at 930–931.

After limited discovery, Campbell moved for summary judgment on a discrete ground. The U.S. Navy enjoys the sovereign's immunity from suit under the TCPA, Campbell argued. The District Court granted the motion. Relying on our decision in Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940), the court held that, as a contractor acting on the Navy's behalf, Campbell acquired the Navy's immunity. No. CV 10–02007DMG (CD Cal., Feb. 22, 2013), App. to Pet. for Cert. 22a–34a, 2013 WL 655237.

The Court of Appeals for the Ninth Circuit reversed the summary judgment entered for Campbell. 768 F.3d 871. The appeals court disagreed with the District Court's ruling on the immunity issue, but agreed that Gomez's case remained live. Concerning Gomez's individual claim, the Court of Appeals relied on its then-recent decision in Diaz v. First American Home Buyers Protection Corp., 732 F.3d 948 (2013). Diaz held that "an unaccepted Rule 68 offer that would fully satisfy a plaintiff's [individual] claim is insufficient to render th[at] claim moot." Id., at 950. As to the class relief Gomez sought, the Ninth Circuit held that "an unaccepted Rule 68 offer of judgment—for the full amount of the named plaintiff's individual claim and made before the named plaintiff files a motion for class certification—does not moot a class action." 768 F.3d, at 875 (quoting Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091–1092 (C.A.9 2011) ).

Next, the Court of Appeals held that Campbell was not entitled to " derivative sovereign immunity" under this Court's decision in Yearsley or on any other basis. 768 F.3d, at 879–881. Vacating the District Court's judgment, the Ninth Circuit remanded the case for further proceedings.³

We granted certiorari to resolve a disagreement among the Courts of Appeals over whether an unaccepted offer can moot a plaintiff's claim, thereby depriving federal courts of Article III jurisdiction. Compare Bais Yaakov v. ACT, Inc., 798 F.3d 46, 52 (C.A.1 2015) ; Hooks v. Landmark Industries, Inc., 797 F.3d 309, 315 (C.A.5 2015) ; Chapman v. First Index, Inc., 796 F.3d 783, 787 (C.A.7 2015) ; Tanasi v. New Alliance Bank, 786 F.3d 195, 200 (C.A.2 2015) ; Stein v. Buccaneers Limited Partnership, 772 F.3d 698, 703 (C.A.11 2014) ; Diaz, 732 F.3d, at 954–955 (holding that an unaccepted offer does not render a plaintiff's claim moot), with Warren v. Sessoms & Rogers, P.A., 676 F.3d 365, 371 (C.A.4 2012) ; O'Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 574–575 (C.A.6 2009) ; Weiss v. Regal Collections, 385 F.3d 337, 340 (C.A.3 2004) (noting that an unaccepted offer can moot an individual plaintiff's claim). We granted review as well to resolve the federal contractor immunity question Campbell's petition raised. 575 U.S. ––––, 135 S.Ct. 2311, 191 L.Ed.2d 977 (2015).

II

Article III of the Constitution limits federal-court jurisdiction to "cases" and "controversies." U.S. Const., Art. III, § 2. We have interpreted this requirement to demand that "an actual controversy ... be extant at all stages of review, not merely at the time the complaint is filed." Arizonans for Official English v. Arizona, 520 U.S. 43, 67, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (quoting Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975) ). "If an intervening circumstance deprives the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ at any point during...