Offers To Settle

Dallas area insurance lawyers need to be aware of a case currently pending before the United States Supreme Court. USA Today published an article discussing the case. The title of the article is, Supreme Court Conundrum: How To Make A Lawsuit Go Away. Here is the discussion.
The Supreme Court debated to a draw Wednesday over an unusual question with broad implications for businesses and consumers: If a defendant in a civil case offers to pay the plaintiff in full, is the lawsuit moot? Is it settled? Or can it live on?
What the justices decide either could give companies a way to avoid class-action lawsuits or prevent consumers from having their challenges ended with a simple payoff.
The battle lines were clear during oral argument: Conservative justices who long have sought to limit class-action lawsuits brought on behalf of a large number of challengers jousted with liberal justices defending the rights of individual plaintiffs to have their cases heard.
The case is one of at least four on the court’s docket this fall that could lead to more or fewer class-action lawsuits. It involves an unsolicited text message sent by a Navy recruiting contractor in apparent violation of the Telephone Consumer Protection Act, which was meant to protect cellphone users from robocalls and mass solicitations.
When 40-year-old José Gomez received the recruitment offer, he sued the contractor, Campbell-Ewald Co., personally and as the potential leader of a class action. Rather than face a potentially large group of cell phone users, the company offered Gomez $1,503 in damages for each unauthorized text, three times what the law requires.
That’s the type of deal judges love and lawyers hate; it clears dockets but wipes potentially lucrative lawsuits from the books. In this case, Gomez didn’t take the bait. A federal district judge ruled against him, but an appeals court reversed the judgment, sending the company to the Supreme Court for relief.
The company’s lawyer, Gregory Garre, noted that plaintiffs in most class actions get only “pennies on the dollars of their claim. The big money goes to the class action lawyers.”
Chief Justice John Roberts, who usually speaks less than his more voluble colleagues, took the lead in arguing that a company’s offer to pay whatever the plaintiff sought should end the case. “You won’t take yes for an answer,” he told Jonathan Mitchell, Gomez’ lawyer. Later, Roberts said, “This is all about class certification.”
The court’s liberal wing took the opposite tack, challenging Garre over his assertion that the case became moot as soon as Gomez was offered full compensation for the unwanted text messages.
“You get to say on your own, unilaterally, ‘I offered you complete relief,'” Justice Sonia Sotomayor said, rhetorically. “You, without any judicial interpretation, intervention, get to moot the case on your terms.”
It is relevant to point out that there are more than a couple of statutes dealing with this issue under Texas law.
One of these is found in the Texas Business & Commerce Code, Section 17.5052. The other is found in the Texas Insurance Code, Section 541.156 through 541.159. There is another in Texas Civil Practices & Remedies Code, Chapter 42.

Contact Information