The blog in a nutshell

The blog in a nutshell

Wednesday, October 14, 2015

Campbell-Ewald v. Gomez: Why the fee request matters

Remember when I quoted Justice Kagan as saying a case will never come up again?  Well, it has.

What Justice Kagan was saying in Genesis HealthCare was that the result was based on a concession that the party was offered the relief it was seeking.  In Campbell-Ewald v. Gomez, one of the principal questions before the Court is whether Justice Kagan was right that this concession was the determinant factor.

Critical to the oral argument* in this case was the question of whether the plaintiff-Respondent indeed got all they requested.  In this case, Gomez asked for attorneys' fees (which he might not have been entitled to) and injunctive relief.  The settlement offer did not include these things.  The district court ruled that Gomez conceded that the offer gave him complete individual relief.  Gomez contested this before the Ninth Circuit, which did not have to rule on the issue because it was going to rule for Gomez either way.  Now it is before the Supreme Court.

Here is why this matters, in particular the fees.  The reason this issue is relevant is because the Defendant-Respondent, Campbell-Ewald, is taking a strategy that can be very effective in avoiding class liability when you have a lot of claims, particularly when they aren't worth that much.  What you do is you allow yourself to be sued.  Make the guy file a complaint, because you don't want to pay off everyone who asks.  You can even file a motion to dismiss, engage in some discovery, whatever.  Raise the costs to bringing the claim.  Then, before certification can be addressed by the Court, you offer to settle the one individual claim for everything *that individual* is asking for.  The case goes away.

But remember, this is a class action.  These cases are brought because it is really only efficient to resolve them en masse.  This strategy is terribly inefficient!  But that's actually good for you, because your plaintiff won't be able to find any attorneys who will be willing to take the case.  They aren't going to put the time and effort into a case for hours unless they get paid.  And unless a plaintiff is paying them by the hour, they won't get paid unless a class gets certified.  No lawyers, no case, no liability for Evald-Campbell.

Or unless the Court orders the defense to pay their fees!  If Plaintiffs' counsel gets paid *anyway*, these cases will still proceed, and Campbell-Evald avoids nothing by their strategy.

And so the claim for fees is really important.  If the Court rules that a fee claim doesn't count for purposes of whether an offer is complete, and then finds such an offer is binding even in the class situation, then Campbell-Evald's strategy is vindicated.  But if the Court rules that it does not, then Plaintiffs will simply make sure to include their claim for fees in every case, even when they aren't entitled to it, to avoid mootness.**  And, in doing so, the Court will never have to resolve the question of whether mootness doctrine can be a magic talisman to avoid class actions.

And if it rules - as Chief Justice Roberts suggests - that it should accept the finding of a concession?  Then it has just wasted everyone's time again.  But, I think, it must be very careful should it decide this.  It cannot merely, as Chief Justice Roberts suggested, accept that the district court found this and the Ninth Circuit did not affirmatively disagree.  If so, then the Chief will have waived Gomez's right to challenge this particular factual finding, and he'll never get a substantive opportunity *merely because the 9th Circuit ruled for him on other grounds.*  The Court should instead remand to hear that part of the case.  But if they're going to do that anyway, then why bother hearing the case in the first instance?

In other words, this case should have been DIGged (basically a shorthand way of saying the Court never should have taken the case in the first place) from the start.

* There's quite a confounding error in the transcript, at least as of the time I read it.  Both the respondent and the United States had their own attorneys argue for reversal.  The opinion randomly switches between purporting to quote the respondent's attorney (Mitchell) and the Government's attorney (Yang).   I think the error is typographical, and Mitchell spoke first, then Yang.  But it would be funny if Yang just started interrupting Mitchell's oral argument, and then Mitchell did the same to Yang.  Har har.

**Of course, in every battle there's a volley and a riposte.  Can a party move to dismiss or for summary judgment on the fee claim *before* certification?  Is such an order final and appealable?  Can a case with an appealable final order actually be moot?  These questions, fascinating as they may be, simply prove that Kagan is right and Scalia is wrong here.

No comments:

Post a Comment