Gomez v. Campbell-Ewald Co.

768 F.3d 871

Jose GOMEZ, individually and on behalf of a class of similarly situated individuals, Plaintiff–Appellant

v.CAMPBELL–EWALD COMPANY, Defendant–Appellee.

No. 13–55486.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 11, 2014.

Filed Sept. 19, 2014.

Evan M. Meyers (argued), McGuire Law, P.C., Chicago, IL; Michael J. McMorrow, McMorrow Law, P.C., Chicago, IL; and David C. Parisi, Parisi & Havens LLP, Sherman Oaks, CA, for Plaintiff–Appellant.

Laura A. Wytsma (argued), Michael L. Mallow, Christine M. Reilly, and Meredith J. Siller, Loeb & Loeb LLP, Los Angeles, CA, for Defendant–Appellee.

Appeal from the United States District Court for the Central District of California, Dolly M. Gee, District Judge, Presiding. D.C. No. 2:10–cv–02007–DMG–CW.

Before: FORTUNATO P. BENAVIDES,^* KIM McLANE WARDLAW, and RICHARD R. CLIFTON, Circuit Judges.

OPINION

BENAVIDES, Circuit Judge:

Plaintiff Jose Gomez appeals adverse summary judgment on personal and putative class claims brought pursuant to the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b)(1)(A)(iii) (2012). Gomez alleges that the Campbell–Ewald Company instructed or allowed a third-party vendor to send unsolicited text messages on behalf of the United States Navy, with whom Campbell–Ewald had a marketing contract. Because we conclude that Campbell–Ewald is not entitled to immunity, and because we find no alternate basis upon which to grant its motion for summary judgment, we vacate the judgment and remand to the district court.

I.

The facts with respect to Gomez's personal claim are largely undisputed. On May 11, 2006, Gomez received an unsolicited text message stating:

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 [number].

The message was the result of collaboration between the Navy and the Campbell–Ewald Company,¹ a marketing consultant hired by the Navy to develop and execute a multimedia recruiting campaign. The Navy and Campbell–Ewald agreed to “target” young adults aged 18 to 24, and to send messages only to cellular users that had consented to solicitation. The message itself was sent by Mindmatics, to whom the dialing had been outsourced. Mindmatics was responsible for generating a list of phone numbers that fit the stated conditions, and for physically transmitting the messages. Neither the Navy nor Mindmatics is party to this suit.

In 2010, Gomez filed the present action against Campbell–Ewald, alleging a single violation of 47 U.S.C. § 227(b)(1)(A)(iii), which states:

It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States—

(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice—...

(iii) to any telephone number assigned to a paging service [or] cellular telephone service....

Gomez contends that he did not consent to receipt of the text message. He also notes that he was 40 years old at the time he received the message, well outside of the Navy's target market. It is undisputed that a text message constitutes a call for the purposes of this section. See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 952 (9th Cir.2009) (“[W]e hold that a text message is a ‘call’ within the meaning of the TCPA.”). In addition to seeking compensation for the alleged violation of the TCPA, Gomez also sought to represent a putative class of other unconsenting recipients of the Navy's recruiting text messages.

After a 12(b)(6) motion to dismiss was denied, Campbell–Ewald tried to settle the case. Campbell–Ewald offered Gomez $1503.00 per violation, plus reasonable costs, but Gomez rejected the offer by allowing it to lapse in accordance with its own terms.

Campbell–Ewald then moved to dismiss the case under Rule 12(b)(1), arguing that Gomez's rejection of the offer mooted the personal and putative class claims. After the court denied the motion, Campbell–Ewald moved for summary judgment, seeking derivative immunity under Yearsley v. W.A. Ross Construction Co., 309 U.S. 18, 60 S.Ct. 413, 84 L.Ed. 554 (1940). In opposition to the summary judgment motion, Gomez presented evidence that the Navy intended the messages to be sent only to individuals who had consented or “opted in” to receive messages like the recruiting text. A Navy representative testified that Campbell–Ewald was not authorized to send texts to individuals who had not opted in. The district court ultimately granted the motion, holding that Campbell–Ewald is “immune from liability under the doctrine of derivative sovereign immunity.” Gomez v. Campbell–Ewald Co., No. CV 10–2007 DMG CWX, 2013 WL 655237, at *6 (C.D.Cal. Feb. 22, 2013). Gomez filed a timely appeal, arguing that the Yearsley doctrine is inapplicable.

This Court reviews summary judgment de novo, affirming only where there exists no genuine dispute of material fact. Satterfield, 569 F.3d at 950 ; see also Fed.R.Civ.P. 56(a). We are free to affirm “on any basis supported by the record.”Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1047 (9th Cir.2009).

II.

We begin with jurisdiction. Upon Gomez's timely appeal, Campbell–Ewald filed a motion to dismiss for lack of jurisdiction, arguing that the personal and putative class claims were mooted by Gomez's refusal to accept the settlement offer. We denied that motion without prejudice, and now reject Campbell–Ewald's argument on the merits.

Gomez's individual claim is not moot. Campbell–Ewald argues that “whether or not the class action here is moot,” the individual claim was mooted by Gomez's rejection of the offer. The company is mistaken. Although this issue was unsettled until recently, we have now expressly resolved the question. “[A]n unaccepted Rule 68 offer that would fully satisfy a plaintiff's claim is insufficient to render the claim moot.” Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948, 950 (9th Cir.2013). Because the unaccepted offer alone is “insufficient” to moot Gomez's claim, and as Campbell–Ewald identifies no alternate or additional basis for mootness, the claim is still a live controversy.

Similarly, the putative class claims are not moot. We have already explained 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.” Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091–92 (9th Cir.2011). Like the Pitts plaintiff, Gomez rejected the offer before he moved for class certification. Gomez's rejection therefore does not affect any class claims.

Campbell–Ewald recognizes that it is asking this panel to depart from these precedents. Yet it is well settled that we are bound by our prior decisions. Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.2003) (en banc). Although there is an exception for precedents that have been overruled, that exception applies only where “the relevant court of last resort [has] undercut the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable.” Ibid. Campbell–Ewald argues that Pitts and Diaz are clearly irreconcilable with the Supreme Court's recent decision in Genesis Healthcare Corp. v. Symczyk, ––– U.S. ––––, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013). Campbell–Ewald overstates the relevance of that case, which involved a collective action brought pursuant to § 16(b) of the Fair Labor Standards Act. Id. at 1526–27. The defendant argued that the case was mooted by the plaintiff's rejection of a settlement offer of complete relief. Id. at 1528. The Supreme Court ultimately agreed, first accepting the lower court's conclusion that the personal claim was moot, and then holding that the named plaintiff had “no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness.” Id. at 1532.

Campbell–Ewald correctly observes that Genesis undermined some of the reasoning employed in Pitts and Diaz. For example, the Pitts opinion referred to the risk that a defendant might “pick off” named plaintiffs in order to evade class litigation. 653 F.3d at 1091 (quoting Weiss v. Regal Collections, 385 F.3d 337, 344 (3d Cir.2004) ). The Genesis Court distanced itself from such reasoning, pointing out that the argument had only been used once by the high Court, and only “in dicta.” 133 S.Ct. at 1532 (referring to Deposit Guar. Nat'l Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 339, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980) ). Nevertheless, courts have universally concluded that the Genesis discussion does not apply to class actions.² In fact, Genesis itself emphasizes that “Rule 23 [class] actions are fundamentally different from collective actions under the FLSA” and, therefore, the precedents established for one set of cases are “inapplicable” to the other. 133 S.Ct. at 1529. Accordingly, because Genesis is not “clearly irreconcilable” with Pitts or Diaz, this panel remains bound by circuit precedent, and Campbell–Ewald's mootness arguments must be rejected. Miller, 335 F.3d at 900.

III.

Campbell–Ewald's constitutional challenge is equally unavailing. The company argues that the statute is unconstitutional either facially or as applied, but its argument relies upon a flawed application of First Amendment principles. Although the district court did not ultimately reach this issue, the record confirms that the challenge was properly raised below.

We have already affirmed the constitutionality of this section of the TCPA. Moser v. FCC, 46 F.3d 970, 973–74 (9th Cir.1995). The government may impose reasonable restrictions on the time, place, or manner of protected speech, provided that the restrictions “are justified without reference to the content...