TCPA Class Action Survives Defendant’s Attempt to Pick off the Named Class Member By Deposit

Can a named class representative continue to represent a putative TCPA class action even after a Defendant pays the Plaintiff the highest amount he/she could possibly recover on their individual claim? That question was left open in the U.S. Supreme Court’s decision in  Campbell-Ewald Co. v. Gomez,136 S. Ct. 663 (2016) but was answered  affirmatively by a district court in Maryland last week in Boger v. Trinity Heating & Air, Inc., Case No. 17-7729, 2018 WL 6050886 (D. Md. Nov. 16, 2018.)

Setting the stage. Supreme Court precedent counsels that a named class representative must have standing at all stages of the litigation. Black letter law also dictates that an uncertified class is not a legal entity capable of pursuing a claim on its own. So if a named class representative’s claim is mooted, the entire action–including the class components–should go away.

At least in theory.

In practice appellate courts over the years have concocted numerous “relation back” doctrines designed to save class actions from efforts by Defendants to “pick off” class representatives by paying them the full amount recoverable on their individual claims. The fear is that class actions under Rule 23 would evaporate if a Defendant could always just throw  few bucks at a class representative and make the claim disappear.

The law in this area continues to be in flux. In Campbell-Ewald the Supreme Court confirmed that an offer to settle a claim exceeding the amount recoverable by a class representative is insufficient to moot a claim at all–a rejected offer is a legal nullity with no effect on an underlying claim (probably).  But the divided Supreme Court in Campbell-Ewald reserved the issue of whether mootness can be bought with an effective delivery of the necessary sums to the Plaintiff.

Since Cambpell Ewald, many have tried and failed to pick off TCPA claims using the old “deposit-money-with-the-court trick.” The Ninth Circuit was first to determine that class representatives cannot be forcefully bought off in Chen v. Allstate Insurance Company, 819 F.3d 1136 (9th Cir. 2016).  The Seventh and Second Circuits have followed suit–although the Seventh Circuit has suggested that a pick off move may create valid grounds to challenge a class representative’s adequacy to represent the class. See Fulton Dental v. Bisco, Inc., 860 F.3d 541 (7th Cir. 2017).

That brings us to Boger. In that case a named class representative received 3 faxes. It sued on behalf of thousands of others that had received similar faxes. The Defendant deposited $6,000.00 with the court for Plaintiff’s benefit–more than Plaintiff could have ever recovered on its individual claim. Defendant then moved to dismiss on the ground that the claim had been mooted by the tender of complete relief.

The Boger court disagreed. Following Chen the court concluded “a class action plaintiff should have the opportunity to seek class certification before a defendant can force a settlement.” Even if a complete payment is made, therefore, the Boger court finds that it does not “necessarily satisfy Boger’s interest in pursuing a class action, which simply cannot be met by any offer that precludes him from seeking class certification.” Boger at *5.

The idea that a Plaintiff has a non-pecuniary “interest” in representing a class that cannot be mooted is curious and does not appear to derive from Rule 23 or any other federal statute. Nonetheless, this notion has cropped up time and again in TCPA “pick off” cases. Keep it in mind folks.

--

Editor's note: This article is provided through a partnership between insideARM and Womble Bond Dickinson. WBD powers our TCPA case law chart and provides a steady stream of their timely, insightful and entertaining take on this ever-evolving, never-a-dull-moment topic. WBD - and all insideARM articles - are protected by copyright. All rights are reserved.