Family Medicine Pharmacy, LLC v. Perfumania Holdings, Inc.

Filing 67

Order denying 49 Corrected Motion to Dismiss. Answer due from defendants by 7/19/2016. Signed by Chief Judge William H. Steele on 7/5/2016. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
FAMILY MEDICINE PHARMACY, LLC, )
)
Plaintiff,
)
)
v.
)
)
PERFUMANIA HOLDINGS, INC., et al.,
)
)
Defendants.
)

CIVIL ACTION 15-0563-WS-C

ORDER
This matter comes before the Court on Defendants’ Corrected Motion to Dismiss
Plaintiff’s Amended Complaint (doc. 49). The Motion has been extensively briefed and is now
ripe for disposition.
I.

Nature of the Case and Procedural Posture.
A.

Plaintiff’s Claims and Allegations.

This putative class action arises from alleged violations of the Telephone Consumer
Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 (the “TCPA” or the
“Act”).1 Plaintiff, Family Medicine Pharmacy LLC (“Family Medicine”), alleges that it received
unsolicited faxes advertising defendants’ products on June 30, 2015, and again on September 23,
2015. (Doc. 18, ¶ 16.) Both fax advertisements bore the name “Quality Fragrance Group” and
purported to market discounted men’s and women’s fragrances for commercial sale. (Doc. 18, at
1

In relevant part, the TCPA makes it unlawful for any person “to use any telephone
facsimile machine, computer, or other device to send to a telephone facsimile machine, an
unsolicited advertisement,” 47 U.S.C. § 227(b)(1)(C), unless certain enumerated conditions are
satisfied. The statute creates a private right of action to bring suit “based on a violation of this
subsection or the regulations prescribed under this subsection to enjoin such violation” and “to
recover for actual monetary loss from such a violation, or to receive $500 in damages for each
such violation, whichever is greater.” 47 U.S.C. § 227(b)(3). In the event of a willful or
knowing violation of the TCPA’s prohibition on unsolicited fax advertisements, “the court may,
in its discretion, increase the amount of the award to an amount equal to not more than 3 times”
the $500 statutory damages cap, or up to $1,500 per violation. Id.

Exhs. A & B.) The fax header running across the top of each advertisement began with the
phrase “From: Perfumania.” (Id.) Family Medicine maintains that these two facsimile
transmissions violated the TCPA’s prohibition on unsolicited junk faxes, and that defendants’
violations were knowing and willful. On that basis, plaintiff seeks treble statutory damages for
each alleged violation, plus a declaratory judgment that these faxes violate the TCPA, a
permanent injunction “prohibiting Defendants’ practice of sending or causing to be sent
unsolicited advertisements,” and reasonable attorney’s fees and costs. (Id. at 7-8.)
The Amended Complaint names four defendants, to-wit: Perfumania Holdings, Inc.
(“PHI”), Quality King Fragrance, Inc. (“Quality King”), Perfumania, Inc. (“Perfumania”), and
Quality Fragrance Group (“Quality Fragrance”). Plaintiff’s pleading states that Quality
Fragrance is a subsidiary of PHI and of Quality King; that Quality Fragrance “serves as an alter
ego” of the other defendants; and that Quality Fragrance is “so controlled” by those defendants
“as to make it a mere tool of its parents.” (Doc. 18, ¶ 5.) As to each purportedly TCPA-violative
fax transmission, the Amended Complaint alleges that “Defendants used a telephone facsimile
machine … to send an unsolicited advertisement,” and that “[b]oth faxes were sent via a fax
telephone number operated by and/or controlled by defendants.” (Id., ¶¶ 16-17.)
Family Medicine did not bring this action solely on its own behalf; rather, its pleading is
framed as a putative class action complaint. Family Medicine asserts that defendants have
engaged in “the transmission of thousands of unsolicited facsimiles throughout the country … in
an intentional and persistent course of conduct, to Plaintiff and the putative class members.”
(Id., ¶ 15.) On that basis, plaintiff seeks to represent a class consisting of “[a]ny and all
individuals and/or entities who, from 2011 to the present, received one or more unsolicited
advertisements via facsimile from Defendants.” (Id., ¶ 19.)2
2

The Court observes that Family Medicine filed at least eight other virtually
identical actions against other entities in this District Court last year alone. In each case, Family
Medicine purported to assert class action claims for TCPA violations arising from one or more
unauthorized fax transmissions advertising a defendant’s products or services. See, e.g., Family
Medicine Pharmacy, LLC v. Gulf Coast Pharmaceuticals Plus, LLC, Civil Action No. 15-0615KD-M (S.D. Ala.), filed December 2, 2015; Family Medicine Pharmacy, LLC v. TRXADE Group
Inc., et al., Civil Action No. 15-0590-KD-B (S.D. Ala.), filed November 18, 2015; Family
Medicine Pharmacy, LLC v. Global, LLC, Civil Action No. 15-0564-C (S.D. Ala.), filed
November 3, 2015; Family Medicine Pharmacy, LLC v. Owen Mumford USA, Inc., Civil Action
No. 15-0290-CG-N (S.D. Ala.), filed June 2, 2015; Family Medicine Pharmacy, LLC v.
(Continued)
-2-

B.

Defendants’ Offer of Judgment, and Accompanying Tender.

Of critical importance to the pending Motion to Dismiss, defendants transmitted a Rule
68 Offer of Judgment to plaintiff’s counsel on or about March 3, 2016. In that Offer of
Judgment, defendants denied that the subject faxes violated the TCPA, but nonetheless “offer[ed]
to pay Plaintiff $1,503 – that is in excess of the $500 statutory damages pursuant to 47 U.S.C. §
227(b)(3)(B), trebled for willful or knowing violations – for each of the two specific violations
set forth in the Complaint, for a total payment to Plaintiff of $3,006.” (Doc. 47, ¶ 3 & Exh. A, ¶
2.a.) Additional components of the Offer of Judgment included the following: (i) an offer to pay
plaintiff’s “reasonable costs allowable under law” in this matter; (ii) an offer to stipulate to a
permanent injunction barring defendants from transmitting unsolicited fax advertisements to
plaintiff in the future; (iii) a provision that the offer “shall remain open beyond fourteen days
after service of this offer, until such time as it is either accepted by Plaintiff or withdrawn in
writing by Defendants;” and (iv) defendants’ denial of liability and disclaimer any waiver of
objections or defenses. (Doc. 47, Exh. A.)3
In transmitting the Offer of Judgment to plaintiff’s counsel via Federal Express on March
3, 2016, defendants enclosed a cashier’s check in the amount of $3,006.00 made payable to
“Family Medicine Pharmacy LLC.” (Doc. 47, ¶ 3 & Exh. A, ¶ 2.a.) That same day, defendants’
counsel telephonically communicated the sum and substance of the settlement proposal to
plaintiff’s counsel. (Doc. 56, Exh. C at ¶ 4.) Plaintiff’s counsel promptly rejected that offer.

Sheralven Enterprises, Ltd., Civil Action No. 15-0194-KD-B (S.D. Ala.), filed April 10, 2015;
Family Medicine Pharmacy, LLC v. Stewart Marketing and Associates, Inc., Civil Action No.
15-0193-KD-B (S.D. Ala.), filed April 10, 2015; Family Medicine Pharmacy, LLC v. Primed
Pharmaceuticals, LLC, Civil Action No. 15-0188-KD-B (S.D. Ala.), filed April 7, 2015; Family
Medicine Pharmacy, LLC v. Advanced RX, Inc., Civil Action No. 15-0187-KD-B (S.D. Ala.),
filed April 7, 2015. All or nearly all of these other civil actions appear to have resulted in
expeditious out-of-court settlements or voluntary dismissals. At any rate, the case at bar appears
to be the only one of Family Medicine’s recent putative class action filings in this judicial district
giving rise to the “picking off” issues that have been so ardently litigated here.
3

The Offer of Judgment did not provide for attorney’s fees because, as defendants
correctly point out, that remedy is unavailable under the Act. See, e.g., Reid v. I.C. Systems, Inc.,
304 F.R.D. 253, 256 (D. Ariz. 2014) (“The TCPA does not provide for awards of attorneys’
fees.”); Klein v. Vision Lab Telecommunications, Inc., 399 F. Supp.2d 528, 542 (S.D.N.Y. 2005)
(“[t]he TCPA makes no provision for attorney’s fees”).

-3-

(Id.) Nonetheless, defendants’ written Offer of Judgment and accompanying check were
delivered to plaintiff’s counsel’s office on March 4, 2016. (Doc. 47, ¶ 4 & Exh. B; doc. 56, Exh.
C at ¶ 7.) Eleven days later, defendants’ counsel received an envelope from plaintiff’s counsel’s
office returning the original $3,006.00 cashier’s check, which had not been endorsed, negotiated
or cashed. (Doc. 47, ¶ 6; doc. 56, Exh. C at ¶ 7.) Defendants’ counsel presently holds the
$3,006 cashier’s check in trust, and stands ready to retransmit such instrument to plaintiff’s
counsel upon request. (Doc. 47, ¶ 7.)
At various times, plaintiff’s counsel have suggested that defendants’ offer was deficient
in some way. Defendants have taken multiple steps to correct any such identified shortcomings.
For example, when plaintiff balked that the settlement amount offered was inadequate because it
lacked any allowance for costs or prejudgment interest, defendants’ counsel sent plaintiff’s
counsel a letter dated March 30, 2016, advising that defendants had caused a second cashier’s
check to be issued, payable to plaintiff in the amount of $1,000.00, to cover all legally allowable
costs and interest. The March 30 letter reflected that defendants’ counsel was holding the $1,000
cashier’s check in trust, and was prepared to send that check along with the previously returned
$3,006 cashier’s check to Family Medicine upon request. (Doc. 47, ¶ 8 & Exh. C.)4 Similarly,
to rebut plaintiff’s objection that the proffered injunctive relief would not encompass all named
defendants, defendants issued a clarification that “any references to ‘Defendants’ in the Offer of
Judgment hereby include all of the defendants named in this case.” (Doc. 60, ¶ 3.)
C.

The Motion to Dismiss.

Defendants have now filed a Motion to Dismiss, consisting of two separate prongs. First,
defendants maintain that the Offer of Judgment effectively provides complete relief to Family
Medicine, thereby eliminating any bona fide controversy in this action and mandating dismissal
of the Amended Complaint for lack of subject matter jurisdiction under Article III. Second,
defendants assert that the Amended Complaint fails to state a claim on which relief can be
granted as to defendants PHI and Perfumania because it flunks the Twombly / Iqbal plausibility
test. In so arguing, defendants rely on their own representations that PHI “has no products” and
4

That same afternoon, plaintiff’s counsel e-mailed a curt response to defendants’
counsel reading, in its entirety, “Thanks but no thanks. Offer rejected.” (Doc. 47, ¶ 9 & Exh. D.)
There appears to have been no further negotiation between the parties relative to the rejected
offer of judgment as modified by the March 30 letter.

-4-

Perfumania “sells products only at the retail level, not at wholesale.” (Doc. 49, at 3.) Plaintiff
vigorously opposes both grounds animating the Motion to Dismiss.5
II.

The Mootness / Jurisdictional Argument Relating to the Offer of Judgment.
A.

The Campbell-Ewald Decision.

Defendants’ Motion implicates the hot-button issue of whether and, if so, under what
circumstances an unaccepted offer of judgment may moot a class action complaint. Over the
years, certain defendants seeking to avoid the onerous effects of Rule 23 litigation have
developed the aggressive tactic of “picking off” putative class representatives at the outset of the
case, prior to ruling on class certification (or even the filing of class certification motions), via
Rule 68 offers of judgment providing them full relief on their individual claims. The idea is to
forestall class certification, on the theory that if the named plaintiffs have no active claims, then
there can be no class action and the whole case falls apart, with defendants bearing only a tiny
fraction of their potential exposure had class certification been granted. Courts and litigants
alike have been grappling with this controversial practice for some time.6
5

The Motion to Dismiss is not the only noteworthy motion pending in this case; to
the contrary, Family Medicine’s Preliminary Motion for Class Certification (doc. 19) and Motion
to Consider Class Certification upon Completion of Reasonable Discovery (doc. 29) were filed
within days after the first iteration of defendants’ Motion to Dismiss. The certification issue has
been briefed; however, the Court considers the jurisdictional issues raised by the Motion to
Dismiss first. After all, if defendants were correct that their Offer of Judgment and tender of
settlement funds to Family Medicine moots the entire action, then there would be no case or
controversy left and, hence, no jurisdiction allowing the Court to take up plaintiff’s motions
relating to class certification.
6

See, e.g., Deposit Guaranty Nat’l Bank, Jackson, Miss. v. Roper, 445 U.S. 326,
339, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980) (“Requiring multiple plaintiffs to bring separate
actions, which effectively could be ‘picked off’ by a defendant’s tender of judgment before an
affirmative ruling on class certification could be obtained, obviously would frustrate the
objectives of class actions; moreover it would invite waste of judicial resources by stimulating
successive suits brought by others claiming aggrievement.”); Zeidman v. J. Ray McDermott &
Co., 651 F.2d 1030, 1050 (5th Cir. 1981) (“By tendering to the named plaintiffs the full amount
of their personal claims each time suit is brought as a class action, the defendants can in each
successive case moot the named plaintiffs’ claims before a decision on certification is reached.
A series of individual suits, each brought by a new named plaintiff, could individually be ‘picked
off’ before class certification; as a practical matter, therefore, a decision on class certification
could, by tender to successive named plaintiffs, be made … difficult to procure in a case like the
one now before us …. The fact remains that in those cases in which it is financially feasible to
pay off successive named plaintiffs, the defendants would have the option to preclude a viable
(Continued)
-5-

Fortunately, the Supreme Court weighed in on this issue earlier this year in CampbellEwald Co. v. Gomez, --- U.S. ----, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). In most (but not all)
respects, Campbell-Ewald bears striking similarities to this case. The plaintiff in CampbellEwald brought a putative class action alleging that the defendant, an advertising and marketing
agency, had violated the TCPA by sending unsolicited text messages targeted at recruiting young
adults to the U.S. Navy. Before the deadline for motions for class certification, the defendant
submitted a Rule 68 offer of judgment, whereby it offered to pay the named plaintiff $1,503 per
text message he had received personally, plus costs and a stipulated injunction, to settle his
individual claims. When the plaintiff failed to accept the Rule 68 offer, the defendant moved to
dismiss the case for lack of subject matter jurisdiction, arguing that the unaccepted offer of
judgment mooted the plaintiff’s individual claims by providing him complete relief.
The Supreme Court held in Campbell-Ewald “that Gomez’s complaint was not effaced by
Campbell’s unaccepted offer to satisfy his individual claim.” 136 S.Ct. at 670. In reaching this
result, the Court relied on “basic principles of contract law” to conclude that once the
defendant’s Rule 68 offer of judgment was rejected, it “had no continuing efficacy.” Id. Indeed,
“with no settlement offer still operative, the parties remained adverse; both retained the same
stake in the litigation they had at the outset.” Id. at 670-71. The majority observed that a
contrary approach “would place the defendant in the driver’s seat” by allowing it to utilize
unilateral, unaccepted settlement activity “to avoid a potential adverse decision, one that could
expose it to damages a thousand-fold larger than the bid Gomez declined to accept.” Id. at 672.
Furthermore, the majority reasoned, “a would-be class representative with a live claim of her
own must be accorded a fair opportunity to show that certification is warranted.” Id. On that

class action from ever reaching the certification stage.”); Susman v. Lincoln American Corp., 587
F.2d 866, 870 (7th Cir. 1978) (“If a tender made to the individual plaintiff while the motion for
certification is pending could prevent the courts from ever reaching the class action issues, that
opportunity is at the mercy of a defendant, even in cases where a class action would be most
clearly appropriate.”); Jenkins v. Pech, 301 F.R.D. 401, 406 (D. Neb. 2014) (“allowing class
action defendants to ‘pick off’ plaintiffs with settlement offers prior to obtaining an affirmative
ruling on class certification obviously would frustrate the objectives of class actions and would
invite waste of judicial resources”) (citations and internal quotation marks omitted).

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basis, the Campbell-Ewald Court concluded, “an unaccepted settlement offer or offer of
judgment does not moot a plaintiff’s case.” Id.
That said, Campbell-Ewald expressly left unanswered the critical question of whether it
would make any difference if the defendant had, in addition to making a Rule 68 offer of
judgment, actually tendered settlement funds contemporaneously with that offer. See id. at 672
(“We need not, and do not, now decide whether the result would be different if a defendant
deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff,
and the court then enters judgment for the plaintiff in that amount.”). Not surprisingly, in the
wake of Campbell-Ewald, savvy class-action defendants seeking to avoid that ruling’s adverse
effects have tweaked their “picking off” strategy to exploit the back door left ajar by CampbellEwald, a narrow gray area in the jurisprudence of unaccepted Rule 68 offers. Indeed, that is
precisely what PHI, Perfumania, Quality King and Quality Fragrance have done in this case by
sending Family Medicine a cashier’s check for $3,006 contemporaneously with their offer of
judgment. Defendants’ Motion to Dismiss is rooted in the premise that the act of tendering
complete relief (cashier’s checks, stipulated injunction, etc.) distinguishes this case from
Campbell-Ewald and moots Family Medicine’s personal and class claims, notwithstanding
Family Medicine’s express refusal of the offer and immediate return of the cashier’s check.
The legal question the Supreme Court left open in Campbell-Ewald is thus squarely
presented for adjudication here. We know that, as a general proposition, an unaccepted offer of
judgment does not moot a class action plaintiff’s case. The pertinent question, however, is this:
Does the result change if the defendant tenders the settlement funds to the plaintiff upon making
the offer of judgment? Although Campbell-Ewald is of recent vintage (having been decided in
late January 2016), this analytical territory has already been mined extensively in that ruling’s
aftermath. Indeed, over the last five months, non-binding decisions from throughout the country
have surfaced to address this very wrinkle, often in the context of TCPA claims akin to Family
Medicine’s. Thoughtful, well-reasoned decisions have emerged on both sides of the issue;
however, there appears to be an emerging consensus against a finding of mootness.7
7

Several courts, typically keying on language from Campbell-Ewald dissents and a
narrow view of Article III’s “case or controversy” requirement, have determined that the tender
of full individual relief, even if rejected, extinguishes a plaintiff’s live claim. See, e.g., Gray v.
Kern, 143 F. Supp.3d 363, 367 (D. Md. 2016) (“the Court finds that a measure which makes
(Continued)
-7-

B.

Defendants’ Offer and Tender Do Not Moot the Case.

After careful review of the competing strands of authority, as well as the parties’
arguments in their briefs, the Court finds most persuasive the analysis set forth in Ung v.
absolutely clear that the defendant will pay the complete relief the plaintiff can recover and that
the plaintiff will be able to receive that relief will moot the issue in controversy”); Leyse v.
Lifetime Entertainment Services, LLC, --- F. Supp.3d ----, 2016 WL 1253607, *2 (S.D.N.Y. Mar.
17, 2016) (“As here, a defendant’s deposit of a full settlement with the court, and consent to
entry of judgment against it, will eliminate the live controversy before a court.”). However,
other courts have declined to dismiss as moot a named plaintiff’s claims based on a rejected
tender of complete individual relief, where the plaintiff has not yet had a fair opportunity to
pursue class certification. See, e.g., Chen v. Allstate Ins. Co., 819 F.3d 1136, 1147 (9th Cir.
2016) (“when a defendant consents to judgment affording complete relief on a named plaintiff’s
individual claims before certification, but fails to offer complete relief on the plaintiff’s class
claims, a court should not enter judgment on the individual claims, over the plaintiff’s objection,
before the plaintiff has had a fair opportunity to move for class certification”); Fauley v. Royal
Canin U.S.A., Inc., 143 F. Supp.3d 763, 765 (N.D. Ill. 2016) (opining that “it is inappropriate to
enter judgment on a named plaintiff’s individual claims, over the plaintiff’s objection, before the
plaintiff has had a fair opportunity to move for class certification”) (citations and internal
quotation marks omitted); Radha Giesmann, MD, P.C. v. American Homepatient, Inc., 2016 WL
3407815, *3 (E.D. Mo. June 16, 2016) (“Here, the Court has not yet held a hearing or ruled on
the Motion for Class Certification. Thus, the Court finds it inappropriate to allow Defendant to
tender payment to the class representative on his individual claims, over Plaintiff’s objection, to
presumably incapacitate the class action before Plaintiff has had a fair opportunity to show that
certification is warranted.”); Brady v. Basic Research, L.L.C., 2016 WL 1735856, *1 (E.D.N.Y.
May 2, 2016) (“[e]ntering judgment against Defendants over Plaintiffs’ objections before
Plaintiffs have had the opportunity to file a class certification motion as Defendants request
would ignore the Supreme Court’s holding” in Campbell-Ewald, even with a tender); APB
Associates, Inc. v. Bronco’s Saloon, Inc., --- F. Supp.3d ----, 2016 WL 1394646, *7 n.4 (E.D.
Mich. Apr. 7, 2016) (“This Court does not read Gomez as supporting Defendants’ argument that
Plaintiff’s claim was mooted because Defendants tendered a check to plaintiff in the amount of
the judgment.”); Bais Yaakov of Spring Valley v. Graduation Source, LLC, --- F. Supp.3d ----,
2016 WL 872914, *1 (S.D.N.Y. Mar. 7, 2016) (“Although Defendants sought to avail
themselves of the hypothetical proposed in Campbell-Ewald by depositing the full amount of
statutory damages into the Court’s Finance Unit …, Plaintiff’s individual claims remain live –
this Court has not entered judgment in favor of Plaintiff and has not, by express, written order
released the funds to Plaintiff.”). Still other courts have taken a hybrid approach, mooting
individual claims but allowing class claims to proceed. See, e.g., South Orange Chiropractic
Center, LLC v. Cayan LLC, 2016 WL 1441791, *5 & 7 (D. Mass. Apr. 12, 2016) (“this named
plaintiff no longer has the requisite ‘live claim’ because Defendant has offered to deposit a check
with the court, to satisfy all of Plaintiff’s individual claims (and more), and to have the district
court enter judgment in Plaintiff’s favor,” but “even though Plaintiff’s individuals claims have
become moot, the class action may proceed as a case or controversy under Article III”).

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Universal Acceptance Corp., --- F. Supp.3d ----, 2016 WL 3136858 (D. Minn. June 3, 2016).
The Ung court held that a defendant’s tender of complete relief for a plaintiff’s individual claims
in a putative class action alleging TCPA violations moots neither the named plaintiff’s claims
nor the class claims. As to the individual claims, Ung observed that with the plaintiff’s rejection
of the tender, “the parties remain adverse and, hence, retain the same stake in the litigation they
had at the outset,” meaning that the plaintiff “would end up empty-handed” if the court were to
deem those claims moot merely because the defendant tendered a now-rejected check to the
plaintiff. Id. at *5 (citations and internal marks omitted). In pondering the impact of CampbellEwald, the Ung court mused that “there is no principled difference between a plaintiff rejecting a
tender of payment and an offer of payment,” because “in either case, the plaintiff ends up in the
exact same place he occupied before his rejection.” Id. With respect to class claims, the Ung
opinion stressed that because the plaintiff had brought his case as a putative class action, he had
assumed class responsibilities that he must be given a reasonable opportunity to fulfill. Id. at *6
(“a class-action plaintiff must be afforded a reasonable opportunity to show class certification is
warranted, even if his or her individual claim has been rendered moot,” or else the class action
device does not work). Otherwise, the court in Ung explained, there would be “a ‘race to pay
off’ named plaintiffs very early in the litigation, before they file motions for class certification.”
Id. (citation and internal quotation marks omitted). Ung pointed out that equating tender of a
rejected settlement offer with mootness “would place control of a putative class action in the
defendant’s hands,” against which the Campbell-Ewald majority had expressly warned. Id. at
*7. Ultimately, then, Ung concluded that “[t]he law does not countenance the use of individual
offers to thwart class litigation, because the class-action device is designed to allow similarly
situated plaintiffs to aggregate smaller claims, promoting judicial efficiency.” Id. (citations and
internal quotation marks omitted).
The Court adopts the reasoning and result of the District of Minnesota in Ung v.
Universal Acceptance Corp. In the undersigned’s view, the Ung approach gives proper force
and effect to the Campbell-Ewald directive that “a would-be class representative with a live
claim of her own must be accorded a fair opportunity to show that certification is warranted.”
Campbell-Ewald, 136 S.Ct. at 672 (emphasis added). No one disputes that Family Medicine had
a live claim of its own when it commenced this putative class action against defendants for
violating the TCPA. But defendants’ “picking off” strategy would extinguish Family Medicine’s

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individual live claim without first allowing that named plaintiff “a fair opportunity to show that
certification is warranted,” thus violating the principles underlying Campbell-Ewald. What’s
more, the Ung decision appropriately applies the Campbell-Ewald majority’s words of caution
against “plac[ing] the defendant in the driver’s seat” in class actions by means of “gambit”
designed “to avoid a potential adverse decision, one that could expose it to damages a thousandfold larger” than the tendered amount to settle the named plaintiff’s individual claims. 136 S.Ct.
at 672. If defendants could derail a class action at its inception by picking off named plaintiffs
via Rule 68 offers of judgment and tender of settlement checks for relatively trifling sums, before
a Rule 23 motion could be filed or decided, the resulting game of whac-a-mole would empower
sharp-eyed defendants to prevent a class action from ever getting off the ground. Each time a
new named plaintiff appeared, the defendant could rush in with a Rule 68 offer and a tender of
funds to wipe out the individual claims, erase the named plaintiff, and prevent class certification
from ever being litigated. Such a result would effectively write Rule 23 out of the Federal Rules
of Civil Procedure, eviscerate consumer class actions, grant absolute power to defendants to
destroy class actions in their infancy via a foolproof, inexpensive “picking off” strategy that
plaintiffs would be powerless to prevent, and do violence to the guiding principle that the Federal
Rules of Civil Procedure “should be construed, administered, and employed by the court and the
parties to secure the just, speedy, and inexpensive determination of every action and
proceeding.” Rule 1, Fed.R.Civ.P.
In so concluding, the Court recognizes that defendants’ mootness argument is centered on
Article III’s case-or-controversy limitations on federal jurisdiction. See, e.g., Susan B. Anthony
List v. Driehaus, --- U.S. ----, 134 S.Ct. 2334, 2341, 189 L.Ed.2d 246 (2014) (“Article III of the
Constitution limits the jurisdiction of federal courts to ‘Cases’ and ‘Controversies.’”). “A case is
moot when it no longer presents a live controversy with respect to which the court can give
meaningful relief.” Hunt v. Aimco Properties, L.P., 814 F.3d 1213, 1220 (11th Cir. 2016)
(citation omitted). Defendants’ position is that the tender of complete individual relief to Family
Medicine eliminates any live controversy between the parties, rendering the case moot and
destroying federal jurisdiction pursuant to Article III. Of course, the Federal Rules of Civil

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Procedure must yield to constitutional limitations on jurisdiction.8 But defendants’ argument
overlooks “the flexible character of the Art. III mootness doctrine,” and its “uncertain and
shifting contours.” U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 400-01, 100 S.Ct. 1202, 63
L.Ed.2d 479 (1980) (citation omitted). The Supreme Court has ruled that, where the named
plaintiffs in a putative class action rejected tender of a settlement and the case was involuntarily
dismissed, “[n]either the rejected tender nor the dismissal of the action over plaintiffs’ objections
mooted the plaintiffs’ claim on the merits so long as they retained an economic interest in class
certification.” Deposit Guaranty Nat’l Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 332-33, 100
S.Ct. 1166, 63 L.Ed.2d 4217 (1980).
Moreover, in a TCPA case in which the defendant used Rule 68 offers of judgment to
attempt to moot a putative class action, the Eleventh Circuit has held that even if such offers
were successful in extinguishing the named plaintiffs’ claims, “the class claims remain live, and
the named plaintiffs retain the ability to pursue them.” Stein v. Buccaneers Ltd. Partnership, 772
F.3d 698, 704 (11th Cir. 2014). The Stein court reasoned as follows:
“[I]t is plain that this case still presents a live controversy. The plaintiffs say BLP
violated the Telephone Consumer Protection Act and that all class members are
entitled to money damages; BLP denies it. In indistinguishable circumstances,
Zeidman [v. J. Ray McDeromott & Co., 651 F.2d 1030 (5th Cir. 1981)] held the
dispute was still live and said: ‘The case before us, therefore, rests not on whether
there exists a live controversy, but on whether the district court has before it some
plaintiff with a personal stake in that controversy.’ Id. at 1042. The same is true
here.”
Stein, 772 F.3d at 704-05. Thus, binding precedent in this Circuit holds that even if a defendant
successfully “picks off” a named plaintiff’s individual claims via Rule 68 offer of judgment
before adjudication of class certification issues, there remains a live controversy and, hence, no
Article III jurisdictional problem.9 Defendants’ jurisdictional argument is soundly defeated by
8

See, e.g., Roper, 445 U.S. at 332 (“[T]he right of a litigant to employ Rule 23 is a
procedural right only, ancillary to the litigation of substantive claims. Should these substantive
claims become moot in the Art. III sense, by settlement of all personal claims for example, the
court retains no jurisdiction over the controversy of the individual plaintiffs.”).
9

Defendants insist that Stein is distinguishable because it “only addresses the effect
of an unaccepted and expired Rule 68 offer in which the defendant did not make any actual
payments in redress of plaintiffs’ claims.” (Doc. 46, at 19.) But this argument misapprehends
the critical portion of Stein. The Stein mootness analysis considered both the Rule 68 offers’
(Continued)
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Stein, and “[t]he Court perceives no tension between Rule 23 and Article III under the
circumstances here.” Ung, 2016 WL 3136858, at *7.
For all of the foregoing reasons, defendants’ Motion to Dismiss is denied insofar as it is
predicated on the theory that this action has been rendered moot by defendants’ Rule 68 offer of
judgment and accompanying tender of full relief on Family Medicine’s individual claims, which
tender was promptly and emphatically rejected. There remains a live controversy here, and
Family Medicine will be given a fair and reasonable opportunity to show that class certification
is warranted, without being railroaded into an involuntary settlement as part of a defense
“picking off” tactic designed to bury class certification issues joined in this litigation before they
can ever be heard.

effect on the named plaintiffs’ claims and those offers’ effect on the class claims. The first part
of that discussion (in which the Eleventh Circuit concluded that the Rule 68 offers of judgment
did not moot the plaintiffs’ individual claims) may indeed be distinguished from our case
because the Stein defendants did not tender funds to settle the named plaintiffs’ individual
claims, whereas our defendants did. But the second part of the Stein mootness analysis – in
which the Eleventh Circuit stated as “an alternate basis for this holding” of non-mootness that
“[e]ven if the individual claims are somehow deemed moot the class claims remain live, and the
named plaintiffs retain the ability to pursue them,” 772 F.3d at 704 – cannot be distinguished in
this manner. The offer-versus-tender dichotomy urged by defendants would not affect the
second prong of the Stein mootness analysis at all. In that portion of Stein, the Eleventh Circuit
opined that “the clear law of the circuit” provides that a live controversy remains even if the
named plaintiffs’ claims are moot. To the extent that defendants would point to bits of dicta in
the Campbell-Ewald majority or dissenting opinions, or particular justices’ isolated, off-the-cuff
remarks during oral argument, as a means of neutralizing or rebutting Stein’s unambiguous
ramifications for this case, such arguments must fail. Whatever tension might exist between
Stein and Campbell-Ewald on this point “is insufficient to change the clear law of the circuit”
because “[a] Supreme Court dictum in a different setting rarely suffices to overturn a clear circuit
holding on the precise question at issue.” Stein, 772 F.3d at 709. That is what we have here. In
Stein, the Eleventh Circuit unequivocally held, in reliance on circuit precedent, that even if
named plaintiffs’ individual claims in a putative class action could be mooted via the Rule 68
mechanism, “the class claims remain live, and the named plaintiffs retain the ability to pursue
them.” Id. at 704. That defendants might stitch together fragments of non-binding language to
the contrary from particular justices’ remarks, concurring and dissenting opinions, and dicta in
Campbell-Ewald to tell a different story in no way overturns or undermines the clear circuit
holding in Stein, reinforcing what has been the law in this Circuit dating back 35 years to
Zeidman.

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III.

The Twombly Issue as to Perfumania Holdings, Inc. and Perfumania, Inc.
As a separate, independent ground for their Motion to Dismiss, defendants assert that the

Amended Complaint fails to state plausible claims for relief under the TCPA against defendants
PHI and Perfumania.
To withstand Rule 12(b)(6) scrutiny and satisfy Rule 8(a), a plaintiff must plead “enough
facts to state a claim to relief that is plausible on its face,” so as to “nudge[] [its] claims across
the line from conceivable to plausible.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127
S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d
868 (2009) (citation omitted). “This necessarily requires that a plaintiff include factual
allegations for each essential element of his or her claim.” GeorgiaCarry.Org, Inc. v. Georgia,
687 F.3d 1244, 1254 (11th Cir. 2012). Thus, minimum pleading standards “require[] more than
labels and conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Twombly, 550 U.S. at 555. As the Eleventh Circuit has explained, Twombly / Iqbal
principles require that a complaint’s allegations be “enough to raise a right to relief above the
speculative level.” Speaker v. U.S. Dep’t of Health and Human Services Centers for Disease
Control and Prevention, 623 F.3d 1371, 1380 (11th Cir. 2010) (citations omitted). “To survive a
Rule 12(b)(6) motion to dismiss, the complaint does not need detailed factual allegations … but
must give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it
rests.” Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010) (citations and internal quotation
marks omitted).
The focal point of the plausibility analysis must be the pleading itself. Here, wellpleaded factual allegations in the Amended Complaint include the following: (i) defendant
Quality Fragrance is a subsidiary of PHI (doc. 18, ¶ 5); (ii) Quality Fragrance “serves as an alter
ago” of PHI and Perfumania (id.); (iii) Quality Fragrance “is so controlled by Perfumania [and
PHI] … as to make it a mere tool” of those entities (id.); (iv) “Defendants’ primary activities
involve advertising to persons and entities in an effort to generate sales leads for their cosmetic
and fragrance products” (Id., ¶ 6); (v) “Defendants utilize ‘fax blasting’ activities to generate
sales leads for their products” (id., ¶ 14); (vi) on certain specified dates, “Defendants used a
telephone facsimile machine … to send an unsolicited advertisement … advertising the

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commercial availability of Defendants’ products” (Id., ¶ 16); and (vii) “[b]oth faxes were sent via
a fax telephone number operated by and/or controlled by defendants” (id., ¶ 17). Although the
faxes themselves purport to advertise the products of “Quality Fragrance Group,” both of the
allegedly offending fax transmissions, which are appended to the Complaint as exhibits, bear a
fax header stating “From: Perfumania.” (Id., Exhs. A & B.)
In advancing their Twombly / Iqbal argument, defendants reason that “it is not plausible
to allege that PHI sent a fax to advertise its products when it has no products.” (Doc. 46, at 3.)
They further insist that “Perfumania is a retail chain with over 320 stores, and that it sells
products only at the retail level.” (Id.) Thus, defendants maintain that Family Medicine’s claims
against defendant PHI and Perfumania flunk the requisite plausibility analysis because “neither
PHI nor Perfumania promote goods for wholesale distribution.” (Id.) To bolster these factual
assertions, defendants cite to various exhibits outside the pleadings, including declarations and
excerpts of Form 10-K statements, of which they urge the Court to take judicial notice. (See doc.
47, ¶ 11 & Exh. E; doc. 61.) In short, defendants’ position is that PHI and Perfumania cannot be
liable under the TCPA for faxes advertising wholesale distribution of products, because PHI has
no products and Perfumania has no wholesale distribution.
Defendants’ argument overlooks the applicable legal standard. For purposes of this Rule
12(b)(6) analysis, the Court accepts as true all well-pleaded factual allegations of the Amended
Complaint, and draws all reasonable inferences in Family Medicine’s favor. See, e.g., Keating v.
City of Miami, 598 F.3d 753, 762 (11th Cir. 2010) (in reviewing Rule 12(b)(6) motion, court must
“accept[] the facts alleged in the complaint as true,” “draw[] all reasonable inferences in the
plaintiff’s favor,” and “limit[] our review to the four corners of the complaint”).10 Those wellpleaded factual allegations reflect that Quality Fragrance (the entity whose products were
10

Notwithstanding this deference to plaintiff’s pleading, it is also true that “[l]egal
conclusions without adequate factual support are entitled to no assumption of truth.” Mamani v.
Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011); see also Chandler v. Secretary of Florida Dep’t
of Transp., 695 F.3d 1194, 1199 (11th Cir. 2012) (“the tenet that a court must accept as true all of
the allegations contained in a complaint is inapplicable to legal conclusions”) (citation omitted);
Randall, 610 F.3d at 709-10 (“A district court considering a motion to dismiss shall begin by
identifying conclusory allegations that are not entitled to an assumption of truth – legal
conclusions must be supported by factual allegations. The district court should assume, on a
case-by-case basis, that well pleaded factual allegations are true, and then determine whether
they plausibly give rise to an entitlement to relief.”).

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ostensibly being advertised in the purportedly violative faxes) is so linked to and controlled by
PHI and Perfumania as to be “a mere tool” of those entities; that the faxes themselves were
“From: Perfumania;” that defendants’ primary activities were to “generate sales leads for their
cosmetic and fragrance products;” and that defendants sent the faxes to “advertis[e] the
commercial availability of Defendants’ products.” Defendants may well vigorously dispute
those factual allegations.11 But the Rule 12(b)(6) stage is not the proper time to argue that the
plaintiff’s version of the facts is incorrect, or to introduce other exhibits and testimony (as
defendants have) to support conflicting factual narratives. The Court accepts the facts alleged in
the Amended Complaint as true for purposes of adjudicating the Motion to Dismiss. Those
factual allegations are sufficient to state plausible claims against PHI and Perfumania for
violations of the TCPA, inasmuch as they plausibly show that the faxes were sent on those
defendants’ behalf.12
11

For example, defendants argue and offer evidence that “PHI does not sell any
products.” (Doc. 46, at 11.) But the Amended Complaint alleges otherwise. The same is true of
defendants’ position concerning Perfumania. The ensuing tit-for-tat conflicting evidentiary
submissions offered by the parties underscore the importance and utility of the rule requiring
factual allegations in a complaint to be accepted as true on a motion to dismiss. This is not
summary judgment. No discovery has taken place. Rather than having this Court draw halfbaked factual conclusions from incomplete (and potentially distorted or inaccurate) factual
records, the rule mandates that Family Medicine’s well-pleaded factual allegations be subjected
to the crucible of discovery, rather than being summarily rejected on Rule 12(b)(6) review as
defendants would have this Court do. Stated differently, applicable procedural rules require that
the well-pleaded facts alleged in Family Medicine’s pleading be accepted for Rule 12(b)(6)
purposes even when defendants offer contrary exhibits.
12

In so concluding, the Court is cognizant of the Eleventh Circuit’s deference to the
Federal Communications Commission’s construction of the TCPA’s “to send” requirement as
establishing “direct liability for an entity on whose behalf goods or services were promoted by
unsolicited fax advertisement,” such that “the sender [is] the party ‘on whose behalf facsimiles
are transmitted.’” Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d
1245, 1256-57 (11th Cir. 2015). However, the Amended Complaint contains sufficient factual
allegations that PHI and Perfumania were entities on whose behalf the purportedly offending fax
transmissions promoted products. After all, the pleading alleges that the products at issue were
those of defendants, that defendants’ primary activities involved advertising to generate sales
leads for those products, that defendants used fax-blasting activities to generate sales leads for
their products, that PHI and Perfumania control Quality Fragrance as their “mere tool,” that the
fax transmissions purported to market Quality Fragrance products, that the fax header listed
“Perfumania” as the sender, and so on. Based on these and other factual allegations in the
Amended Complaint, Family Medicine has plausibly alleged sufficient facts to state a claim that
(Continued)
-15-

IV.

Conclusion.
For all of the foregoing reasons, Defendants’ Corrected Motion to Dismiss (doc. 49) is

denied. Defendants are ordered to answer the Amended Class Action Complaint by no later
than July 19, 2016.
DONE and ORDERED this 5th day of July, 2016.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

PHI and Perfumania would qualify as TCPA “senders,” inasmuch as those facts (if proven)
would support a plausible inference that the faxes in question were transmitted on those
defendants’ behalf to promote goods or services.

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