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SUPREME COURT OF THE UNITED STATES
_________________
No. 14–857
_________________
CAMPBELL-EWALD COMPANY, PETITIONER
v.
JOSE GOMEZ
on writ of certiorari to the united states
court of appeals for the ninth circuit
[January 20, 2016]
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 (2013) (slip op., at 5, 6, n. 4). 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) 48Stat. 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 (CA9 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
(CD 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
(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 (CA9 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 judg-ment, 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 (CA1 2015);
Hooks v.
Landmark
Industries, Inc., 797 F. 3d 309, 315 (CA5 2015);
Chapman
v.
First Index, Inc., 796 F. 3d 783, 787 (CA7 2015);
Tanasi v.
New Alliance Bank, 786 F. 3d 195, 200 (CA2
2015);
Stein v.
Buccaneers Limited Partnership, 772
F. 3d 698, 703 (CA11 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 (CA4 2012);
O’Brien v.
Ed
Donnelly Enterprises, Inc., 575 F. 3d 567, 574–575 (CA6 2009);
Weiss v.
Regal Collections, 385 F. 3d 337, 340 (CA3
2004) (holding that an unaccepted offer can moot a plaintiff’s
claim). We granted review as well to resolve the federal contractor
immunity question Campbell’s petition raised. 575 U. S. ___
(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 (1997) (quoting
Preiser v.
Newkirk, 422 U. S. 395, 401 (1975) ).
“If an intervening circumstance deprives the plaintiff of a
‘personal stake in the outcome of the lawsuit,’ at any point during
litigation, the action can no longer proceed and must be dismissed
as moot.”
Genesis HealthCare Corp., 569 U. S., at ___
(slip op., at 4) (quoting
Lewis v.
Continental Bank
Corp., 494 U. S. 472 –478 (1990)). A case becomes moot,
however, “only when it is impossible for a court to grant any
effectual relief what-ever to the prevailing party.”
Knox v.
Service Employees, 567 U. S. ___, ___ (2012) (slip op.,
at 7) (internal quotation marks omitted). “As long as the parties
have a concrete interest, however small, in the outcome of the
litigation, the case is not moot.”
Chafin v.
Chafin,
568 U. S. ___, ___ (2013) (slip op., at 6) (internal quotation
marks omitted).
In
Genesis HealthCare, the Court
considered a collective action brought by Laura Symczyk, a former
employee of Genesis HealthCare Corp. Symczyk sued on behalf of
herself and similarly situated employees for alleged violations of
the Fair Labor Standards Act of 1938, 29 U. S. C. §201
et seq. In that case, as here, the defendant served the
plaintiff with an offer of judgment pursuant to Rule 68 that would
have satisfied the plaintiff’s individual dam-ages claim. 569
U. S.
, at ___ (slip op., at 2). Also as here, the
plaintiff allowed the offer to lapse by failing to respond within
the time specified in the Rule.
Ibid. But unlike the case
Gomez mounted, Symczyk did not dispute in the lower courts that
Genesis HealthCare’s offer mooted her individual claim.
Id.,
at ___ (slip op., at 5). Because of that failure, the
Genesis
HealthCare majority refused to rule on the issue. Instead, the
majority simply assumed, without deciding, that an offer of
complete relief pursuant to Rule 68, even if unaccepted, moots a
plaintiff’s claim.
Ibid. Having made that assumption, the
Court proceeded to consider whether the action remained justiciable
on the basis of the collective-action allegations alone. Absent a
plaintiff with a live individual case, the Court concluded, the
suit could not be maintained.
Id., at ___ (slip op., at
6).
Justice Kagan, writing in dissent, explained
that she would have reached the threshold question and would have
held that “an unaccepted offer of judgment cannot moot a case.”
Id., at ___ (slip op., at 3). She reasoned:
“When a plaintiff rejects such an
offer—however good the terms—her interest in the lawsuit remains
just what it was before. And so too does the court’s ability to
grant her relief. An unaccepted settlement offer—like any
unaccepted contract offer—is a legal nullity, with no operative
effect. As every first-year law student learns, the recipient’s
rejection of an offer ‘leaves the matter as if no offer had ever
been made.’
Minneapolis & St. Louis R. Co. v.
Columbus Rolling Mill, 119 U. S. 149, 151 (1886) .
Nothing in Rule 68 alters that basic principle; to the contrary,
that rule specifies that ‘[a]n unaccepted offer is considered
withdrawn.’ Fed. Rule Civ. Proc. 68(b). So assuming the case was
live before—because the plaintiff had a stake and the court could
grant relief—the litigation carries on, unmooted.”
Ibid.
We now adopt Justice Kagan’s analysis, as has
every Court of Appeals ruling on the issue post
Genesis
HealthCare.[
4] Accordingly,
we hold that Gomez’s complaint was not effaced by Campbell’s
unaccepted offer to satisfy his individual claim.
As earlier recounted, see
supra, at 3–4,
Gomez commenced an action against Campbell for violation of the
TCPA, suing on behalf of himself and others similarly situated.
Gomez sought treble statutory damages and an injunction on behalf
of a nationwide class, but Campbell’s settlement offer proposed
relief for Gomez alone, and it did not admit liability. App. to
Pet. for Cert. 58a. Gomez rejected Campbell’s settlement terms and
the offer of judgment.
Under basic principles of contract law,
Campbell’s settlement bid and Rule 68 offer of judgment, once
rejected, had no continuing efficacy. See
Genesis
HealthCare, 569 U. S., at ___ (Kagan, J., dissenting)
(slip op., at 3). Absent Gomez’s acceptance, Campbell’s settlement
offer remained only a proposal, binding neither Campbell nor Gomez.
See App. to Pet. for Cert. 59a (“Please advise whether Mr. Gomez
will accept [Campbell’s] offer . . . .”). Having
rejected Campbell’s settlement bid, and given Campbell’s continuing
denial of liability, Gomez gained no entitlement to the relief
Campbell previously offered. See
Eliason v.
Henshaw,
4 Wheat. 225, 228 (1819) (“It is an undeniable principle of the law
of contracts, that an offer of a bargain by one person to another,
imposes no obligation upon the former, until it is accepted by the
latter . . . .”). In short, with no settlement offer
still operative, the parties remained adverse; both retained the
same stake in the litigation they had at the outset.
The Federal Rule in point, Rule 68, hardly
supports the argument that an unaccepted settlement offer can moot
a complaint. An offer of judgment, the Rule provides, “is
considered withdrawn” if not accepted within 14 daysof its service.
Fed. Rule Civ. Proc. 68(a), (b). The sole built-in sanction: “If
the [ultimate] judgment . . . is not more favorable than
the unaccepted offer, the offeree must pay the costs incurred after
the offer was made.” Rule 68(d).
In urging that an offer of judgment can render a
controversy moot, Campbell features a trio of 19th-century railroad
tax cases:
California v.
San Pablo & Tulare R.
Co., 149 U. S. 308 (1893) ,
Little v.
Bowers, 134 U. S. 547 (1890) , and
San Mateo
County v
. Southern Pacific R. Co., 116 U. S. 138
(1885) . None of those decisions suggests that an
unaccepted
settlement offer can put a plaintiff out of court. In
San
Pablo, California had sued to recover state and county taxes
due from a railroad. In response, the railroad had not merely
offered to pay the taxes in question. It had actually deposited the
full amount demanded in a California bank in the State’s name, in
accord with a California statute that “extinguished” the railroad’s
tax obligations upon such payment. 149 U. S., at 313–314.
San Pablo thus rested on California’s substantive law, which
required the State to accept a taxpayer’s full payment of the
amount in controversy.
San Mateo and
Little similarly
involved actual payment of the taxes for which suit was brought. In
all three cases, the railroad’s payments had fully satisfied the
asserted tax claims, and so extinguished them.
San Mateo,
116 U. S., at 141–142;
Little, 134 U. S., at
556.[
5]
In contrast to the cases Campbell highlights,
when the settlement offer Campbell extended to Gomez expired, Gomez
remained emptyhanded; his TCPA complaint, which Campbell opposed on
the merits, stood wholly unsatisfied. Because Gomez’s individual
claim was not made moot by the expired settlement offer, that claim
would retain vitality during the time involved in determining
whether the case could proceed on behalf of a class. While a class
lacks independent status until certified, see
Sosna v.
Iowa, 419 U. S. 393, 399 (1975) , a would-be class
representative with a live claim of her own must be accorded a fair
opportunity to show that certification is warranted.
The Chief Justice’s dissent asserts that our
decision transfers authority from the federal courts and “hands it
to the plaintiff.”
Post, at 10. Quite the contrary. The
dissent’s approach would place the defendant in the driver’s seat.
We encountered a kindred strategy in
U. S. Bancorp Mortgage
Co. v.
Bonner Mall Partnership, 513 U. S. 18 (1994)
. The parties in
Bancorp had reached a voluntary settlement
while the case was pending before this Court.
Id., at 20.
The petitioner then sought vacatur of the Court of Appeals’
judgment, contending that it should be relieved from the adverse
decision on the ground that the settlement made the dispute moot.
The Court rejected this gambit.
Id., at 25. Similarly here,
Campbell sought to avoid a potential adverse decision, one that
could expose it to damages a thousand-fold larger than the bid
Gomez declined to accept.
In sum, an unaccepted settlement offer or offer
of judgment does not moot a plaintiff’s case, so the District Court
retained jurisdiction to adjudicate Gomez’s complaint. That ruling
suffices to decide this case. We need not, and do not, now decide
whether the result would be different if a defendant deposits the
full amount of the plaintiff’s individual claim in an account
payable to the plaintiff, and the court then enters judgment for
the plaintiff in that amount. That question is appropriately
reserved for a case in which it is not hypothetical.
III
The second question before us is whether
Campbell’s status as a federal contractor renders it immune from
suit for violating the TCPA by sending text messages to
unconsenting recipients. The United States and its agencies, it is
undisputed, are not subject to the TCPA’s prohibitions because no
statute lifts their immunity. Brief for Peti-tioner 2; Brief for
Respondent 43. Do federal contractors share the Government’s
unqualified immunity from liability and litigation? We hold they do
not.
“[G]overnment contractors obtain certain
immunity in connection with work which they do pursuant to their
contractual undertakings with the United States.”
Brady v.
Roosevelt S. S. Co., 317 U. S. 575, 583 (1943) .
That immunity, however, unlike the sovereign’s, is not absolute.
See
id., at 580–581. Campbell asserts “derivative sovereign
immunity,” Brief for Petitioner 35, but can offer no authority for
the notion that private persons performing Government work acquire
the Government’s embracive immunity. When a contractor violates
both federal law and the Government’s explicit instructions, as
here alleged, no “derivative immunity” shields the contractor from
suit by persons adversely affected by the violation.
Campbell urges that two of our decisions support
its “derivative immunity” defense:
Yearsley, 309 U. S.
18 , and
Filarsky v.
Delia, 566 U. S. ___
(2012). In
Yearsley, a landowner asserted a claim for
damages against a private company whose work building dikes on the
Missouri River pursuant to its contract with the Federal Government
had washed away part of the plaintiff’s land. We held that the
contractor was not answerable to the landowner. “[T]he work which
the contractor had done in the river bed,” we observed, “was all
authorized and directed by the Government of the United States” and
“performed pursuant to the Act of Congress.” 309 U. S., at 20
(internal quotation marks omitted). Where the Government’s
“authority to carry out the project was validly conferred, that is,
if what was done was within the constitutional power of Congress,”
we explained, “there is no liability on the part of the contractor”
who simply performed as the Government directed.
Id., at
20–21.[
6] The Court contrasted
with
Yearsley cases in which a Government agent had
“exceeded his authority” or the authority “was not validly
conferred”; in those circumstances, the Court said, the agent could
be held liable for conduct causing injury to another.
Id.,
at 21.[
7]
In
Filarsky, we considered whether a
private attorney temporarily retained by a municipal government as
an investigator could claim qualified immunity in an action brought
under 42 U. S. C. §1983. Finding no distinction in the
common law “between public servants and private individuals engaged
in public service,” we held that the investigator could assert
“qualified immunity” in the lawsuit. 566 U. S.
, at ___,
___ (slip op., at 8, 5). Qualified immunity reduces the risk that
contractors will shy away from government work. But the doctrine is
bounded in a way that Campbell’s “derivative immunity” plea is not.
“Qualified immunity may be overcome . . . if the
defendant knew or should have known that his conduct violated a
right ‘clearly established’ at the time of the episode in suit.”
Id., at ___ (Ginsburg, J., concurring) (slip op., at 1)
(citing
Harlow v.
Fitzgerald, 457 U. S. 800, 818
(1982) ). Campbell does not here contend that the TCPA’s
requirements or the Navy’s instructions failed to qualify as
“clearly established.”
At the pretrial stage of litigation, we construe
the record in a light favorable to the party seeking to avoid
summary disposition, here, Gomez.
Matsushita Elec. Industrial
Co. v.
Zenith Radio Corp., 475 U. S. 574, 587
(1986) . In opposition to summary judgment, Gomez presented
evidence that the Navy authorized Campbell to send text messages
only to individuals who had “opted in” to receive solicitations.
App. 42–44; 768 F. 3d, at 874. A Navy representative noted the
importance of ensuring that the message recipient list be “kosher”
(
i.e., that all recipients had consented to receiving
messages like the recruiting text), and made clear that the Navy
relied on Campbell’s representation that the list was in
compliance. App. 43. See also
ibid. (noting that Campbell
itself encouraged the Navy to use only an opt-in list in order to
meet national and local law requirements). In short, the current
record reveals no basis for arguing that Gomez’s right to remain
message-free was in doubt or that Campbell complied with the Navy’s
instructions.
We do not overlook that subcontractor
Mindmatics, not Campbell, dispatched the Navy’s recruiting message
to unconsenting recipients. But the Federal Communications
Commission has ruled that, under federal common-law principles of
agency, there is vicarious liability for TCPA violations.
In re
Joint Petition Filed by Dish Network, LLC, 28 FCC Rcd. 6574
(2013). The Ninth Circuit deferred to that ruling, 768 F. 3d,
at 878, and we have no cause to question it. Campbell’s vicarious
liability for Mindmatics’ conduct, however, in no way advances
Campbell’s contention that it acquired the sovereign’s immunity
from suit based on its contract with the Navy.
* * *
For the reasons stated, the judgment of the
Court of Appeals for the Ninth Circuit is affirmed, and the case is
remanded for further proceedings consistent with this opinion.
It is so ordered.