Church v. Accretive Health, Inc.
Filing
16
ORDER denying 15 Motion to to Enter Plaintiff's Motion for Class Certification, then Stay Further Consideration of the Same; denying 14 Motion to Certify Class. Signed by Chief Judge William H. Steele on 4/24/2014. (tgw) (Main Document 16 replaced on 4/24/2014) (tgw).
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
MAHALA A. CHURCH, individually
and on behalf of all similarly situated
individuals,
Plaintiff,
v.
ACCRETIVE HEALTH, INC., aka, dba,
MEDICAL FINANCIAL SOLUTIONS,
Defendant.
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CIVIL ACTION 14-0057-WS-B
PUBLISH
ORDER
This matter comes before the Court on Plaintiff’s Motion for Class Certification (doc. 14)
and “Motion to Enter Plaintiff’s Motion for Class Certification, then Stay Further Consideration
of the Same” (doc. 15).
Plaintiff, Mahala A. Church, filed her Complaint (doc. 1) against Accretive Health, Inc.,
in this District Court on February 11, 2014. The Complaint alleges certain violations of the Fair
Debt Collection Practices Act, 15 U.S.C. § 1692 (“FDCPA”), as well as willful violations of
Church’s discharge in bankruptcy. Importantly, Church’s Complaint frames this case as a
putative class action. Church seeks to litigate her claims on behalf of a class of residents of the
United States who received a similar Accretive collection letter to that received by Church, as
well as a subclass of residents of the Southern District of Alabama who received such an
Accretive collection letter despite the underlying debt having been discharged in bankruptcy. To
date, no scheduling order has been entered, and no discovery deadlines have been set; indeed, the
parties have not even conducted a Rule 26(f) conference, much less submitted the accompanying
report of parties’ planning meeting. This action remains squarely in the starting blocks.
On April 22, 2014, prior to defendant’s filing of a responsive pleading or the
commencement of formal discovery, Church filed a barebones two-page Motion for Class
Certification, plus a contemporaneous Motion to Stay consideration of that Motion for Class
Certification. In the Motion to Stay, Church requests that the Court accept the Rule 23 Motion
for filing, then stay briefing or consideration of it “until appropriate discovery has been
conducted.” (Doc. 15, at 1.) In essence, then, Church asks the Court to accept the Motion for
Class Certification as a mere placeholder, an empty vessel into which plaintiff might pour
substance and content (assuming the evidence gathered in discovery supports it) many months
from now after appropriate class discovery has taken place. As grounds for this request, Church
relies on Seventh Circuit authority opining that “[c]lass-action plaintiffs can move to certify the
class at the same time that they file their complaint … then they can also ask the district court to
delay its ruling to provide time for additional discovery or investigation.” Damasco v. Clearwire
Corp., 662 F.3d 891, 896 (7th Cir. 2011). On that basis, Church asks this Court “not to rule on
this [Rule 23] Motion until such time as the parties have had an adequate opportunity to conduct
discovery and submit appropriate memoranda of law on the issue of class certification.” (Doc.
15, at 2.)
The Court understands, but does not find persuasive, the concern that prompted Church
to file her Motion for Class Certification and Motion to Stay at the outset of this litigation, well
before the first morsel of discovery has changed hands and well before she has collected the facts
on which she intends to rely in that Rule 23 Motion. The rule in the Seventh Circuit is that “a
defendant can render moot a possible class action by offering to settle for the full amount of the
plaintiff’s demands before the plaintiff files a motion for class certification.” McMahon v. LVNV
Funding, LLC, 744 F.3d 1010, 1018 (7th Cir. 2014). This rule, however, spawned fears by the
plaintiffs’ bar that defendants might “pick off” or “buy off” a putative class representative via
unaccepted offer of judgment, thereby mooting a class action before the plaintiff had been able to
complete the necessary discovery to file a Rule 23 motion. To allay these fears, the Seventh
Circuit noted “that there is a simple solution for a putative class representative who wishes to
avoid mootness or buy-off: move to certify the class at the same time that the complaint is filed.”
McMahon, 744 F.3d at 1018. “If the parties have yet to fully develop the facts needed for
certification, then they can also ask the district court to delay its ruling to provide time for
additional discovery or investigation.” Damasco, 662 F.3d at 896. Church’s filings thus adhere
closely to the Damasco / McMahon playbook.
All of this might be compelling if this Court were situated in the Seventh Circuit, if the
law of the Seventh Circuit governed this proceeding, or if the Seventh Circuit approach
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constituted either a majority rule or one as to which the Eleventh Circuit had expressed favor.
This is not the case. In fact, the Seventh Circuit acknowledged the uniqueness of its formulation
of the mootness rule in pick-off situations, and that “[o]ther circuits use a more flexible rule,
under which the would-be representative need only file for class certification without undue
delay after receiving an offer to settle.” McMahon, 744 F.3d at 1018.1 Plaintiff identifies neither
1
Those circuits include, at least, the Third, Fifth, Ninth and Tenth Circuits. See
Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091-92 (9th Cir. 2011) (“[W]e hold 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. If the named plaintiff can still file a timely motion for class certification, the named
plaintiff may continue to represent the class until the district court decides the class certification
issue.”) (footnote omitted); Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1250
(10th Cir. 2011) (“[W]e hold that a named plaintiff in a proposed class action for monetary relief
may proceed to seek timely class certification where an unaccepted offer of judgment is tendered
in satisfaction of the plaintiff’s individual claim before the court can reasonably be expected to
rule on the class certification motion.”); Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 920-21
(5th Cir. 2008) (holding in context of FLSA collective action that when plaintiff “files a timely
motion for certification …, that motion relates back to the date the plaintiff filed the initial
complaint, particularly when one of the defendant’s first actions is to make a Rule 68 offer of
judgment”); Weiss v. Regal Collections, 385 F.3d 337, 348 (3rd Cir. 2004) (“Absent undue delay
in filing a motion for class certification, … where a defendant makes a Rule 68 offer to an
individual claim that has the effect of mooting possible class relief asserted in the complaint, the
appropriate course is to relate the certification motion back to the filing of the class complaint.”).
Many (albeit not all) district courts in other jurisdictions have adopted a similar approach. See,
e.g., Neurocare Institute of Central Florida, P.A. v. Healthtap, Inc., --- F. Supp.2d ----, 2014 WL
1236062, *3 (M.D. Fla. Mar. 25, 2014) (where plaintiff files timely motion for class
certification, and has otherwise fulfilled duty to pursue class certification diligently, Rule 23
motion relates back to the filing of the complaint, such that offer of judgment preceding Rule 23
motion does not moot entire case); March v. Medicredit, Inc., 2013 WL 6265070, *3 (E.D. Mo.
Dec. 4, 2013) (finding that while one district court had recently followed the Seventh Circuit
rule, “the majority of district courts in this Circuit addressing this issue have rejected the
mootness argument in the class action context”); White v. Ally Financial Inc., --- F. Supp.2d ----,
2013 WL 164156, *6 (S.D. W.Va. Jan. 15, 2013) (“I HOLD today that a defendant’s complete
offer of judgment to a named plaintiff in a putative class action prior to a motion for class
certification does not moot the putative class action, as long as the motion for class certification
is ultimately filed without undue delay.”); Kensington Physical Therapy, Inc. v. Jackson Therapy
Partners, LLC, 880 F. Supp.2d 689, 694 (D. Md. 2012) (“The Court finds persuasive holdings of
courts that have employed the relation back doctrine to allow class action claims to go forward
where no certification motion is pending and the plaintiff has received an offer of complete
relief.”); Mullinax v. United Marketing Group, LLC, 2011 WL 4085933, *4 (N.D. Ga. Sept. 13,
2011) (concluding that “when a Rule 68 offer has been made and rejected prior to the time that a
class certification is due to be filed per the scheduling order, the relation back doctrine applies
(Continued)
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argument nor authority suggesting that the Eleventh Circuit is likely to follow Damasco /
McMahon, as opposed to the more relaxed approach of at least four other sister circuits.
Moreover, plaintiff does not show that, even if the Eleventh Circuit were to embrace Damasco,
she would be harmed unless she were allowed to lodge her “placeholder” Rule 23 Motion now.
Even today, district courts in the Seventh Circuit appear to operate under the premise that “a
plaintiff may avoid mooting its claims if it moves for class certification within the fourteen-day
(formerly ten-day) period provided in Rule 68 for responding to offers of judgment.” Gonon v.
Allied Interstate, LLC, 286 F.R.D. 405, 409 (S.D. Ind. 2012). More fundamentally, plaintiff
offers no basis for suspecting that Accretive is somehow predisposed to engage in the universally
condemned tactic of “picking off” the named plaintiff via Rule 68 offer of judgment in an effort
to sabotage the Rule 23 issue from ever reaching the fore. Even if it did, it appears quite possible
(and indeed likely) that an unaccepted Rule 68 offer of judgment would not moot Church’s
individual claims at all, thereby obviating the question of whether a Rule 23 motion must predate
an offer of judgment to avoid mooting the entire action.2
and the action is not deemed to be moot”); Liles v. American Corrective Counseling Services,
Inc., 201 F.R.D. 452, 455 (S.D. Iowa 2001) (“Hinging the outcome of [a motion to dismiss] on
whether or not class certification has been filed is not well-supported in the law nor sound
judicial practice.”).
2
In particular, a stern dissent authored by Justice Kagan and joined in by three
other justices last year cast considerable doubt on the notion that a plaintiff’s claim may be
deemed moot by virtue of an unaccepted offer of judgment in the first place. Genesis Healthcare
Corp. v. Symczyk, --- U.S. ----, 133 S.Ct. 1523, 1534, 185 L.Ed.2d 636 (2013) (“So a friendly
suggestion to the Third Circuit: Rethink your mootness-by-unaccepted-offer theory. And a note
to all other courts of appeals: Don’t try this at home.”) (Kagan, J., dissenting). Although Justice
Kagan’s opinion in Scymczyk was a dissent, her discussion of the mootness issue “conflicts with
nothing in the Court’s opinion” because the majority simply “assume[d], without deciding, the
mootness of Symczyk’s individual claim” in order to reach the narrow FLSA issue as to which
certoriari had been granted. Id. (internal quotation marks omitted). Accordingly, at least four
sitting U.S. Supreme Court Justices support the proposition that an unaccepted Rule 68 offer of
judgment does not moot an individual plaintiff’s claims, and there is no indication that the other
five disagree. If Justice Kagan is correct, then the entire rationale underlying Church’s
premature Rule 23 Motion (i.e., her lawyer’s fear that Accretive will make an offer of judgment
that will bounce the whole case out of court, even if she rejects the offer) evaporates.
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As the foregoing discussion demonstrates, there is precious little reason to believe that
the two-step dance Church proposes here (file a generic Rule 23 Motion at the outset of the case,
then stay it for many months until class discovery concludes and comprehensive briefs are
prepared) is grounded in any justifiable fear that the entire class action may be ripped away from
her absent such a preventive measure. The premise that a Rule 68 offer of judgment moots a
class action in the absence of a prior Rule 23 motion is a decidedly minority view. The Eleventh
Circuit has not accepted it. Plaintiff offers no indication that the Eleventh Circuit would ever be
inclined to adopt it, as indeed most other federal courts have not. Even district courts in the
Seventh Circuit (which propounded that minority review) appear to allow the continued safety
hatch of a two-week window after an offer of judgment is made for the plaintiff to file a class
certification motion. There is no evidence and no reason to believe that Accretive will engage in
such a frowned-upon “picking off” strategy here. And the underlying principle that any offer of
judgment for complete relief would moot Church’s claims even if she did not accept it has
recently faced a withering attack from four U.S. Supreme Court Justices, with no rebuttal from
the others. For all of these reasons, the Court concludes that Church’s “placeholder” Motion for
Class Certification is highly unlikely to confer any meaningful benefit or protection on plaintiff.
On the other side of the ledger, Church’s course of action comes with a cost. The court
file is burdened with an obviously premature Rule 23 Motion that is devoid of content. Clerk’s
Office staff would be required to track, monitor and report the motion for many months as it sits
idly, collecting dust, while the plaintiff gathers information via discovery to populate the motion
with actual substance. In addition to this administrative cost, plaintiff’s actions promote
inefficiency and waste. Not only is it premature, but the Rule 23 Motion filed now may prove
unnecessary because plaintiff may think better of pursuing such a motion based on the results of
discovery. Yet plaintiff advocates a system in which litigants race to the courthouse to file
empty, placeholder motions that may or may not ever be litigated, and that are neither required
nor encouraged by the Federal Rules of Civil Procedure. See Weiss v. Regal Collections, 385
F.3d 337, 347 (3rd Cir. 2004) (federal rules do not “require or encourage premature certification
determinations”). Such a proposal contravenes the spirit of federal practice, and raises
significant concerns as to efficiency and judicial economy.
In the end, the balance is clear. Plaintiff’s straight-out-of-the-chute Rule 23 Motion is
highly unlikely to advance her cause one iota, but is virtually certain to impose administrative
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costs, unnecessary distractions, and an unhelpful drag on efficiency and judicial economy. For
these reasons, plaintiff’s Motion to Enter Plaintiff’s Motion for Class Certification, then Stay
Further Consideration of the Same (doc. 15) is denied. Because the Rule 23 Motion is not being
stayed, plaintiff’s boilerplate Motion for Class Certification (doc. 14) is denied as premature and
lacking specific factual or legal support; provided, however, that plaintiff is authorized to renew
such motion at an appropriate time.
DONE and ORDERED this 24th day of April, 2014.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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