NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the
Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal
errors, in order that corrections may be made before the
preliminary print goes to press.
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.