Perturbed by two allegedly unwanted faxes, Arnold Chapman brought a putative class action under the Telephone Consumer Protection Act (“TCPA”). For himself, he sought the most the statute could provide – $3,000, an injunction, and costs. ($3,000 represents $500 in statutory damages for each of the two faxes, trebled for an allegedly knowing or wilful violation.) The defendant offered Chapman $3,002, and the entry of an injunction, and costs. Chapman let the offer expire without accepting it. The District Court dismissed the case as moot.

Chapman appealed, and late last week, the Seventh Circuit reversed the lower court ruling. In Arnold Chapman v. First Index, Inc., the Seventh Circuit held that an expired offer of judgment does not moot an individual plaintiff’s claims. In so ruling, the panel reversed circuit precedent and aligned itself with the Second, Ninth, and Eleventh Circuits on the issue.

Per the court, “A case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party,” citing to Knox v. Service Employees International Union, 132 S. Ct. 2277, 2287 (2012). “Many other decisions say the same thing. By that standard, Chapman’s case is not moot. The district court could award damages and enter an injunction. Chapman began this suit seeking those remedies; he does not have them yet; the court could provide them.”

The court acknowledged that in other circumstances, an unaccepted offer of judgment would moot the case. Indeed, “If there is only one plaintiff, however, why should a court supply a subsidized dispute-resolution service when the defendant’s offer means that there’s no need for judicial assistance, and when other litigants, who do need the court’s aid, are waiting in a queue?” But in a class setting, “Settlement proposals designed to decapitate the class upset the incentive structure of the litigation by separating the representative’s interests from those of other class members.”

The Seventh Circuit sought to clarify the law in that circuit ahead of the same issues that will be presented for the Supreme Court in Campbell-Ewald Co. v. Gomez. Oral arguments in Campbell-Ewald v. Gomez are scheduled for October 14, 2015.