Supreme Court Rules that Offer of Judgment Does not Moot Class Action

On January 20, 2016, the Supreme Court issued its decision in Campbell-Ewald Co. v. Gomez. Six of the Justices, for differing reasons, held that an unaccepted offer of complete relief does not in and of itself deprive a court of Article III jurisdiction by mooting a plaintiff’s claim.  The Court did, however, leave the door open to find that a fully funded offer of judgment could moot a potential class action by depriving the court of jurisdiction.

The Majority Opinion

Justice Ginsburg's majority opinion adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare Corp. v. Symczyk, reasoning that, under the language of Rule 68(b) and “basic principles of contract law,” an unaccepted offer of judgment, like an unaccepted offer to contract, is a legal nullity that “creates no lasting right or obligation” and has “no continuing efficacy.” The fact that the offer was unaccepted was critical to the majority’s reasoning because it meant that the plaintiff’s claim “stood wholly unsatisfied.” The opinion noted several times that the plaintiff “gained no entitlement to the relief” previously offered and had not received the relief previously sought, and thus retained a personal stake in the outcome of the litigation. See Campbell-Ewald v. Gomez, No. 14-857, slip op. at 8-12 (Jan. 20, 2016).

This is a norrow opinion, however.  It does not speak to a situation where a defendant makes an offer of judgment that completely satisfies all of the plaintiff's demands and then make a payment to satisfiy the offer.

A Fair Opportunity to Show Class Certification is Warranted

The court noted that “a would-be class representative with a live claim must be accorded a fair opportunity to show that certification is warranted.”  The Court went on to analogize an unaccepted offer of judgment to an unaccepted settlement offer, finding that as is the case of an unaccepted settlement offer, and unaccepted offer of judgment could not kick a plaintiff out of court.

Going Forward

It will be interesting going forward to see how defendants react to this ruling.  I predict we will begin to see offers of judgment with payment either accompanying them or paid into court.  We most certainly will see the issue of wheter such payment moots a claim litigated in near future.

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Telemarketer and Debt Collector Statistics

According to the United States Department of Labor Bureau of Labor Statistics, there are 234,520 individuals employed in the telemarketing industry in the United States.  These individuals earn an average annual salary of $28,500.  Over half of these telemarketers work in call centers.

Florida has the most telemarketers (26,940) followed by Texas (24,010), Ohio (18,460), California (16,380), and Arizona (11,330).

There are 346,960 individuals employed as debt collectors according the Bureau of Labor Statistics. Their median pay is $35,540 per year.  Employment projections show that this area will experience a 15% growth between 2012 and 2022, which is faster than the overall national average.

California has the most debt collectors (38,660) followed by Texas (38,010), Florida (22,740), New York (21,360), and Ohio (15,920).

So with over 600,000 people engaged in either telemarketing or debt collection, is it any wonder why our dinner is interrupted on a regular basis?

Thankfully Congress passed the Telephone Consumer Protection Act (TCPA) which prohibits telemarketer or debt collector calls from automated telephone equipment to your cell phone or any service for which you are charged for the call.  It also prohibits voicemails using artificial or prerecorded messages.  And, even better, it prohibits calls to any phone on the "Do Not Call Registry."

As punishment for violating the TCPA consumers may receive $500 per call, and if a court finds the calls are willful violations, up to $1500 per call.  This statute is a powerful tool to address a national epidemic.  

If you have been a victim of telemarketer or debt collector calls, contact a knowledgeable consumer law attorney to determine if you are entitled to damages for violation of the TCPA.

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If You Sue Them... They May Stop

Many debt collectors subscribe to a service that tracks FDCPA, FCRA, TCPA, and TILA litigation. According to one of these services, they can provide debt collectors with a frequent litigant report, a report of people who have filed lawsuits in state and federal courts against debt collectors.  The idea is that if a debtor, whose debt was $1000 for example and whose debt the debt collector paid approximately $33, filed suit against a debt collector previously, then that debtor would be more likely to sue again.  Therefore, the debt collector may likely decide not to pursue the debtor to reduce the risk of being sued and to save litigation costs. 

One service also provides debt collectors with telephone numbers associated with FDCPA, FCRA, TCPA, and TILA litigants so that these numbers can be removed from the debt collectors' data bases. 

Why would debt collectors want this information?  According to Webrecon 1129 FDCPA lawsuits, 298 FCRA lawsuits, and 249 TCPA lawsuits were filed in the month of June 2015.  Year-to-date 5823 FDCPA lawsuits have been filed, 1514 FCRA lawsuits have been filed, and 1318 TCPA lawsuits have been filed.

What does this mean for consumers?  The debt collection industry is in the business of making money, not fighting litigation.  Thus, if a consumer takes the debt collector on in court, it may well be that other debt collectors may choose not to pursue the consumer.

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Eight Things Debt Collectors Won't Tell You

Debt collectors call often and many times threaten debtors in an attempt to get them to pay a debt.  However, many of their tactics are nothing more than a smoke screen.  Below, I discuss 8 things debt collectors won't tell you.

1.  Many of Their Threats Are Just Words

"I am going to inform the creditor that you have refused to pay."  I think the creditor may have figured that out since it has referred or sold your account to a debt collector.

"I will have the sherriff arrest you."  This is not going to happen.

They will set deadlines for your payment as a threat to get you to pay.  You can bet they would take your money after the deadline.

2.  They Have to Stop Calling You at Work If You Tell Them To

If you tell a debt collector to stop calling you at work, the FDCPA requires that the calls stop.  Of course, the debt collector wants to keep calling at work because of the potential embarrassment factor.

3.  They Can't Talk to Others About Your Debt

Debt collectors can't talk to your neightbors, your boss, or any other people other than a co-signer, your spouse, or your attorney.  Of course they want you to believe that your neighbors of boss would find out about the debt in hopes you would pay to prevent them from finding out.

4.  Most Debt Collectors Have Quotas

Since they have quotas, it might be better to hold them off for a while.  It could work to get them to accept less money later in the month.

5.  You Can't Be Sued on Your Debt

Many times debt collectors are attempting to collect old debt that is outside the staute of limitations, and as result, they can't sue you to collect the debt.

6.  The Worst Thing They Can Do Is File Suit

Debt collectors won't tell you that the worst thing they can do to you is file a civil suit?  Why?  Because they have to pay attorneys, filing fees, and wait to be paid until the litigation concludes.  And, they also don't want to risk having counterclaims filed against them for violating the FDCPA.

7.  Paying Them Won't Help Your Credit Score

Debt collectors often tell debtors that they will update their credit report if they pay off the debt.  The fact is that the credit report will keep the negative information associated with the account for six years and six months from the date the debtor stopped paying.

8.  You Likely Won't Have to Pay a Dead Relative's Debt

You are not responsible for your relative's debt unless you were a co-signer or your spouse died in a community property state.  The debt collector may file a claim against the estate of the deceased if the deceased left one.  Beware when a debt collector calls to attempt to collect a debt of a dead relative.

www.debt-relief-law.com

866-279-9721

Robocalls--Stopping An American Pandemic

      America is in the midst of a pandemic. This pandemic is the flood of robocalls Americans receive on a daily basis. According to the FTC, it receives over 200,000 complaints per month about robocalls.

     What are robocalls? The FTC defines “robocalls” as follows:

Robocalls are unsolicited prerecorded telemarketing calls to landline home telephones, and all autodialed or prerecorded calls or text messages to wireless numbers, emergency numbers, and patient rooms at health care facilities.

     So, if you get a call to your home phone that is a prerecorded message from a telemarketer, the call violates the Telephone Consumer Protection Act (“TCPA”). And, if you get an autodialed call, prerecorded call, or text from a telemarketer on your cell phone the call or text violates the TCPA. And, federal courts have now expanded the coverage of the TCPA to also apply to debt collectors.

Because of modern telephone technology that utilizes the Internet robocalls can be made from anywhere in the world. In addition, modern technology also allows robocallers to “spoof” their number on caller id by giving false numbers. This makes catching and punishing robocallers much more difficult. And, because they are almost beyond the law, many robocalls are scams meant to separate people from their money.

     For instance, many offshore casinos text offers to cell phones. Or, scammers call and threaten people with jail time for a debt that in most instances the person doesn’t owe.

What to do? First, get your number registered on the national do not call registry. Although many of scammers could care less and will violate the do not call prohibition, other legitimate telemarketers will obey the prohibition. Second, do not answer your phone if you don’t recognize the number. Many times scammers will leave a voicemail, and on occasion, this can be used as proof against them. However, if you do answer a robocall, hang up. Do not press any number to get removed from their list. Third, file a complaint with the FTC at donotcall.gov. Fourth, if you have gotten a number of these robocalls, contact a consumer law attorney. The TCPA provides that a victim of a robocall may receive $500 per call in damages from the robocaller, and up to $1500 in damages if the violation is willful. Fifth, block the number. This may help somewhat, but do not be surprised to get another call from the same offender using a different number. Sixth, consider using a free robocall blocking service such as Nomorobo.

     This pandemic can be brought under control if consumers are educated about what they can do in reaction to this constant annoyance. However, it will not be easy or automatic.

www.debt-relief-law.com

866-279-9721