In Gomez v. Campbell–Ewald Co., — F.3d —-, 2014 WL 4654478 (9th Cir. 2014), the Court of Appeals for the 9th Circuit reversed the district court’s summary judgment in favor of a TCPA defendant marketing company.
The message was the result of collaboration between the Navy and the Campbell–Ewald Company,FN1 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.
The Court of Appeals held that the Defendant’s Rule 68 offer did not moot the Plaintiff’s case.
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 (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 (1980)). Nevertheless, courts have universally concluded that the Genesis discussion does not apply to class actions.FN2 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.
The Court of Appeals held that the TCPA was a constitutionally enacted statute, that the marketing company did not enjoy immunity because the marketing campaign was for the U.S. Navy, and that the marketing company could be vicariously liable for the text messages even though it did not actually send them itself.
Campbell–Ewald nevertheless argues that it cannot be held liable for TCPA violations because it outsourced the dialing and did not actually make any calls on behalf of its client. See 47 U.S.C. § 227(b)(1)(A)(iii) (rendering it unlawful “to make any call” using an automated dialing system). Gomez, in fact, concedes that a third party transmitted the disputed messages. Even so, Campbell–Ewald’s argument is not persuasive. . . . Campbell–Ewald concedes that the FCC already recognizes vicarious liability in this context, but argues that vicarious liability only extends to the merchant whose goods or services are being promoted by the telemarketing campaign. Yet the statutory language suggests otherwise, as § 227(b) simply imposes liability upon “any person”—not “any merchant.” See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 221 (2008) (interpreting the use of “any” as “all-encompassing”); 47 C.F.R. § 64.1200 (interpreting the phrase “any person” to reach individuals and entities). And although the FCC’s 2013 ruling may emphasize vicarious liability on the part of merchants, the FCC has never stated that vicarious liability is only applicable to these entities.FN6 Indeed, such a construction would contradict “ordinary” rules of vicarious liability, Meyer, 537 U.S. at 285, which require courts to consider the interaction between the parties rather than their respective identities. See RESTATEMENT (THIRD) OF AGENCY (2006) §§ 2.01, 2.03, 4.01 (explaining that agency may be established by express authorization, implicit authorization, or ratification).