Chen v. Allstate Insurance Co.

Topic(s): 
Class Actions
Consumer Justice
Documents:
Case Description: 

In this case, which was brought as a class action, two plaintiffs alleged that Allstate Insurance Company violated the Telephone Consumer Protection Act by making unconsented-to calls to cell phones of class members. Allstate sought to moot the class action by making offers of judgment to the named plaintiffs that, it claimed, would provide them complete individual relief. One plaintiff accepted the offer, but the other did not. Allstate moved to dismiss the case as moot, but the district court denied Allstate’s motion. The district court certified its order for interlocutory appeal, and the Ninth Circuit accepted the appeal. While the appeal was pending, the Supreme Court issued its opinion in Campbell-Ewald Co. v. Gomez, holding that an offer of judgment cannot moot an individual plaintiff’s claims and, therefore, cannot bar the plaintiff from seeking to certify a class.

Following the Supreme Court’s Gomez decision, Allstate paid the money it had offered the remaining named plaintiff into an “escrow account” that would be payable to him if the district court entered judgment in his favor on his individual claims for monetary and injunctive relief. Allstate then argued that by doing so, it had mooted his claims, even though its previous offer of judgment did not have that effect. Public Citizen filed an amicus brief supporting the plaintiff in the Ninth Circuit. The brief explained that Allstate’s actions did not moot the case because they neither provided the plaintiff any relief nor made it impossible for the court to provide relief. Rather, under Allstate’s scheme, the plaintiff would not receive money or injunctive relief unless the district court grants it. Because Allstate’s own plan depended on the court’s continuing ability to grant effectual relief, it did not moot the plaintiff’s claims.

On April 12, 2016, the Ninth Circuit held that the case is not moot. Accepting the theory presented in Public Citizen’s amicus brief, the court held that the case was not moot because the plaintiff could not receive any relief unless the district court took action. The court further held that the court was not required to end the case by entering judgment on Allstate’s terms, even though those terms would provide the plaintiff with complete relief if incorporated in the judgment, because the plaintiff was entitled to a fair chance to seek class certification. The court also held that even if the individual plaintiff’s claims were moot, he could still seek to represent a class under prior Ninth Circuit and Supreme Court precedent, which the court held had not been abrogated by more recent Supreme Court authority.