May 15, 2017 Articles

The Implications of Campbell-Ewald Co. v. Gomez for Consumers and Class Action Lawsuits

By André M. Board

Consumer protection laws provide legal recourse for individuals who are harmed by abusive business practices or defective products. See Consumer Rights—Consumer Protection Law, HG.org. These laws hold sellers of goods and services accountable when they exploit a consumer's lack of knowledge or bargaining power. Manufacturers are also held responsible for defective products that injure consumers. A class of consumers seeking compensation for the harm suffered because of abusive business practices or defective products presents a serious litigation hazard to even the largest corporations due to the potential award of substantial monetary damages. However, a corporation can ensure the matter is not presented before a court by settling with the named plaintiff. Settlement offers are a defendant's countermeasure to litigation, sizable monetary judgments, or punitive damages.

Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), examined whether an unaccepted offer to satisfy the named plaintiff's individual claim is sufficient to moot a putative class action claim. Gomez considers a plaintiff's ability to reject a settlement offer or offer of judgment and maintain a case and controversy required by Article III. The Court was split on the application of Article III and Federal Rule 68 regarding the lower courts' ability to provide relief after a settlement offer has been made to the plaintiff. The Court held that the class representative's rejection of the settlement offer did not moot the plaintiff's individual or putative class action claims. The Court opined that a rejected settlement offer retained the initial interest of both parties in the litigation. The plaintiff did not choose to obtain any relief from the defendant's offer and is therefore still entitled to relief from the court. This case provides procedural protection for consumers seeking to pursue individual and putative class actions. However, it also provides powerful corporations alternative means to force individuals into settlements and avoid putative class actions. This will be detrimental to consumers seeking legal redress for harm caused by abusive business practices or poorly made goods.

This case note discusses how Gomez protects a plaintiff's ability to bring independent and putative class action claims. Second, it discusses the future implications Gomez will have on class action claims. Finally, this case note briefly discusses the implications Gomez will have on Fourth Circuit jurisprudence and consumers within those markets.

Premium Content For:
  • Litigation Section
Join - Now