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Attempted ‘Pick-Off’ Settlement in TCPA Class Action Denied

A federal judge in New Jersey has ruled that a defendant’s attempt to deposit $1,501 into a plaintiff’s credit card account is not enough to dismiss a potential class-action lawsuit alleging violations of the Telephone Consumer Protection Act.

The ruling was issued in Sussino v. Work Out World. A copy of the ruling is available here.

In denying the motion to dismiss, judge Peter G. Sheridan used a recent Supreme Court ruling — Campbell-Ewald Co. v. Gomez — which determined that an unaccepted settlement offer to the representative plaintiff in a class-action lawsuit does not create a lasting right or obligation. The Supreme Court did propose hypothetical question in its ruling — what would happen if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, which is exactly what Work Out World attempted to do.

Work Out World attempted to cite Leyse v. Liftetime Entm’t Servs as a precedent for making its deposit, but in Leyse, class-action status had already been revoked.

The Third Circuit Court of Appeals — which includes the District Court in New Jersey — has yet to rule on a similar case, but Sheridan noted rulings in the Seventh and Ninth Circuits that thwarted attempts to moot a class-action by making a payment toward the lead plaintiff. The maneuver, called a pick-off, is becoming more controversial among litigators.

The problems with the defendants move is that the deposit was made into a credit card controlled by the plaintiff’s employer, not the plaintiff, and that the plaintiff is still entitled to seek class-action certification which has not been ruled on because a class certification motion has been filed yet.

 

 

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