Supreme Court Rules For Class-Action Plaintiff

Date: January 21, 2016

Roberts: Decision Gives Plaintiffs Too Much Power

The New York Times reported that in “a victory for class-action plaintiffs,” the Supreme Court on Wednesday ruled by a 6-to-3 vote “that courts may not dismiss lawsuits simply because a defendant has offered to give the lead plaintiff everything he sought.” The Times notes that a “contrary decision would have allowed companies accused of minor but mass wrongdoing to pick off plaintiffs one by one, frustrating their ability to band together to sue over their claims. ‘Once unaccepted, the offer is off the table,’ Justice Ruth Bader Ginsburg said in summarizing her majority opinion from the bench.” In dissent, Chief Justice John Roberts “said that approach gave plaintiffs too much power. ‘If the defendant is willing to give the plaintiff everything he asks for, there is no case or controversy to adjudicate, and the lawsuit is moot,’ he wrote.”

The AP reported that the case “involves unsolicited text messages sent by the Campbell-Ewald Company to the cellphone of California resident Jose Gomez” as “part of a recruitment campaign the company was running for the Navy.” Gomez “never consented to receive such messages and filed a class-action lawsuit under the Telephone Consumer Protection Act.” Campbell-Ewald “offered Gomez the $1,503 to which he was entitled, far less than the company might be liable for in a class action involving hundreds or even thousands of plaintiffs,” but Gomez “did not accept the offer, and lower courts ruled that the suit could proceed.”

What This Means For Small Business

As they often do not retain in-house counsel, class action lawsuits can prove cripplingly expensive for small businesses. The Supreme Court decision strengthens the hand of plaintiffs and can leave small businesses vulnerable to predatory lawsuits.

Additional Reading

USA Today also covered the story.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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