Ramirez v. Trans Union, LLC

Filing 100

ORDER by Magistrate Judge Jacqueline Scott Corley denying 87 Motion for Reconsideration (ahm, COURT STAFF) (Filed on 7/17/2013)

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1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 10 Northern District of California United States District Court 11 12 SERGIO L. RAMIREZ, on behalf of himself and all others similarly situated, 13 14 Plaintiff, v. 15 16 17 TRANS UNION, LLC, Case No.: 3:12-CV-00632 (JSC) ORDER RE: DEFENDANT’S MOTION FOR RECONSIDERATION OF THE COURT’S MARCH 15, 2013 ORDER DENYING DEFENDANT’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Defendant. 18 19 20 21 22 23 24 25 26 27 28 In this putative class action, Plaintiff Sergio Ramirez sues Defendant Trans Union, a credit reporting agency, alleging that Trans Union violated the Federal Credit Reporting Act and the California Consumer Credit Reporting Agencies Act by failing to ensure “maximum possible accuracy” of its credit reports and to provide consumers proper disclosures. In December of 2012, Defendant served Plaintiff with a Federal Rule of Civil Procedure 68 offer, which Plaintiff did not accept. Shortly thereafter, Defendant moved to dismiss for lack of subject matter jurisdiction. On March 15, 2013, the Court denied Defendant’s motion to dismiss for lack of subject matter jurisdiction, concluding that under binding Ninth Circuit precedent in Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091 (9th Cir. 2011), Defendant’s Rule 68 offer did not moot Plaintiff’s Rule 23 class action complaint. Approximately one 1 month later, the United States Supreme Court decided Genesis HealthCare Corp. v. Symczyk, 2 133 S.Ct. 1523 (2013). In Symczyk, the Court assumed without deciding that the defendant’s 3 unaccepted Rule 68 offer mooted the plaintiff’s individual claims in an FLSA collective 4 action suit, and held that the lawsuit was therefore appropriately dismissed for lack of subject 5 matter jurisdiction. Id. at 1525. 6 Now before the Court is Defendant Trans Union’s motion for reconsideration of the 7 Court’s March 15, 2013 order denying Defendant’s motion to dismiss for lack of subject 8 matter jurisdiction. Defendant contends that Symczyk presents an intervening change in 9 controlling law that dictates dismissal of Plaintiff’s lawsuit. Because Symczyk’s holding is not 10 Northern District of California United States District Court 11 12 “clearly irreconcilable” with Pitts, the Court DENIES the motion for reconsideration. LEGAL STANDARD Pursuant to Northern District Civil Local Rule 7-9, a party may seek leave to file a 13 motion for reconsideration any time before judgment. N.D. Cal. Civ. R. 7-9(a). 14 Reconsideration is suitable if one of the following is satisfied: (1) a material difference in fact 15 or law exists from that which was presented to the Court, which, in the exercise of reasonable 16 diligence, the party applying for reconsideration did not know at the time of the order; (2) the 17 emergence of new material facts or a change of law; or (3) a manifest failure by the Court to 18 consider material facts or dispositive legal arguments presented before entry of judgment. 19 N.D. Cal. Civ. R. 7-9(b)(1)-(3); see also School Dist. No. 1J, Multnomah County, Or. v. 20 ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (“Reconsideration is appropriate if the 21 district court (1) is presented with newly discovered evidence, (2) committed clear error or the 22 initial decision was manifestly unjust, or (3) if there is an intervening change in controlling 23 law.”). Here, Defendant claims that Smyczyk is a “change of law” mandating reconsideration. 24 ANALYSIS 25 Defendant makes several arguments urging reconsideration: (1) that Pitts should not 26 control because its facts are too dissimilar from the present action; (2) that Symczyk overrules 27 Pitts’ holding that Rule 23 class actions are not mooted by unaccepted Rule 68 offers that 28 would satisfy a named plaintiff’s individual claims, and (3) that Plaintiff’s individual claim is 2 1 fully satisfied and therefore is moot. Taking each argument in turn, the Court holds that 2 Defendant is barred from challenging the Court’s previous reliance on Pitts, finds that 3 Symczyk is not clearly irreconcilable with Pitts, and declines to decide whether Plaintiff’s 4 individual claims have been fully satisfied. Accordingly, the Court DENIES the motion for 5 reconsideration. 6 A. Defendant Cannot Challenge the Court’s Previous Application of Pitts The Court denied Defendant’s Motion to Dismiss on the ground that in Pitts the Ninth 7 court ruled: “we hold that an unaccepted Rule 68 offer of judgment —for the full amount of 10 the named plaintiff’s individual claim and made before the named plaintiff files a motion for 11 Northern District of California Circuit “squarely addressed” the circumstances of this case. (Dkt. No. 76 at 4.) The Pitts 9 United States District Court 8 class certification—does not moot a class action.” Pitts, 652 F.3d at 1091-92. Pursuant to this 12 binding Ninth Circuit holding, the Court denied Defendant’s motion to dismiss. (Dkt. No. 76 13 at 4-5.) 14 In its Motion to Dismiss briefing, Defendant recognized the split among the circuits on 15 the issue of the mooting power of an unaccepted Rule 68 offer, acknowledged Pitts’ authority 16 in this Circuit, and hoped that Symczyk would resolve the split by following the opposing 17 approach taken in some other circuits. (Dkt. No. 52 at 8.) Defendant did not argue that Pitts 18 did not apply to the facts of this case. On reconsideration, however, Defendant now argues 19 that Pitts is not factually analogous and therefore should not control. This is an improper 20 argument because it does not fall within the narrow scope of the basis for reconsideration: 21 Symczyk’s effect on Pitts. Moreover, Local Rule 7-9(c) bars attempts to “repeat any oral or 22 written argument made by the applying party in support of or in opposition to the 23 interlocutory order which the party now seeks to have reconsidered,” and although 24 Defendant’s previous briefing did not address Pitts at length, it recognized its authority in this 25 Circuit, pursuant to which the Court made its March 15 decision. N.D. Cal. Civ. R. 7-9(c). 26 In any event, the Court finds Defendant’s belated attempt to distinguish Pitts 27 unavailing. Defendant argues that, unlike the Pitts’ plaintiff’s claim, Ramirez’s claim is not 28 transitory in nature. The Pitts court, however, explicitly stated that claims need not be 3 1 “inherently transitory” to merit protection from being proclaimed moot based upon an 2 unaccepted Rule 68 offer. See Pitts, 653 F.3d at 1091 (“we see no reason to restrict 3 application of the relation-back doctrine only to cases involving inherently transitory 4 claims”). The court explained that “although Pitt’s claims are not inherently transitory as a 5 result of being time sensitive, they are acutely susceptible to mootness in light of [the 6 defendant’s] tactic of picking off lead plaintiffs with a Rule 68 offer to avoid a class action. 7 The end result is the same: a claim transitory by its very nature and one transitory by virtue of 8 the defendant’s litigation strategy share the reality that both claims would evade review.” Id. 9 The claims asserted by Plaintiff and the class will evade review if Defendant is allowed to 10 “pick off” each subsequent lead plaintiff, the same concern raised in Pitts. Defendant’s assertion that if, in fact, there are large numbers of consumers similarly Northern District of California United States District Court 11 12 situated to Plaintiff, Defendant’s supposed strategy of picking off each successive lead 13 plaintiff “would quickly become a financially impossible strategy to pursue,” (Dkt. No. 92 at 14 3.), is simply a disagreement with Pitts’ reasoning, not a basis for not applying Ninth Circuit 15 binding precedent. Defendant’s motion to dismiss is controlled by Pitts. 16 B. 17 Symczyk Does Not Overrule Pitts This Court is bound by Pitts unless “the relevant court of last resort . . . undercut the 18 theory or reasoning underlying the prior circuit precedent in such a way that the cases are 19 clearly irreconcilable.” Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003). Because the 20 Court’s goal “must be to preserve the consistency of circuit law,” only if the intervening 21 holding is “irreconcilable” with the prior circuit holding may the Court reverse an opinion that 22 is consistent with Ninth Circuit case law. Id. at 900; see also Lair v. Bullock, 697 F.3d 1200, 23 1204 (9th Cir. 2012) (“The presumption is that our [previous] holding [] is controlling in this 24 case . . . and we find that [an intervening holding] does not overcome this presumption.”); 25 Biggs v. Sec’y of California Dep't of Corr. & Rehab., 2013 WL 2321449, at *10 (9th Cir. May 26 29, 2013) (“Under our law-of-the-circuit rule, we are bound by Johnson unless it is ‘clearly 27 irreconcilable’ with intervening Supreme Court precedent.”). Defendant insists that Symczyk 28 overrules Pitts and mandates dismissal. The Court disagrees. 4 Symczyk is an FLSA collective action, whereas Pitts is a Rule 23 class action. 1 The 1 action, as opposed to a Rule 23 class action. Calling Rule 23 cases “inapposite” and 4 “inapplicable” to an FLSA claim, the Court declined to apply case law from Rule 23 actions 5 “because Rule 23 actions are fundamentally different from collective actions under the 6 FLSA.” Id. at 1524. The Rule 23 cases the Court cited to as inapplicable to Symczyk’s FLSA 7 lawsuit included three cases cited by the Ninth Circuit in Pitts: Geraghty, Roper, and Sosna. 8 See Symczyk, 133 S.Ct. at 1530–32. The Court’s delineation between Rule 23 class actions 9 and FLSA collective actions bars a finding that Symczyk is “clearly irreconcilable” with Pitts. 10 See Canada v. Meracord, LLP, C12-5657 BHS, 2013 WL 2450631, slip op. at 1 (W.D. Wash. 11 Northern District of California Supreme Court explicitly distinguished between the scenario presented by Symczyk, an FLSA 3 United States District Court 2 June 6, 2013) (calling Pitts “directly on point” and stating, “there is nothing to indicate that 12 the [Symczyk] holding extends beyond FLSA collective actions”); Chen v. Allstate Ins. Co., 13 2013 WL 2558012, at *8 (N.D. Cal. June 10, 2013) (“Genesis, which was an FLSA collective 14 action, is easily distinguishable from Pitts.”); see also Schlaud v. Snyder, 2013 WL 2221589, 15 at *6 n.3 (6th Cir. May 22, 2013) (refusing to find a class action moot based upon an 16 unaccepted Rule 23 offer and stating, “[t]he Court’s decision in Genesis Healthcare Corp. v. 17 Symczyk is not at odds with this determination because it does not involve class certification 18 under Rule 23”); Singer v. Illinois State Petroleum Corp., 2013 WL 2384314, at *1 (N.D. Ill. 19 May 24, 2013) (declaring that the Seventh Circuit’s doctrine of “prevent[ing] the mooting of 20 class actions by picking off the named plaintiff” is “still alive and well” after Symczyk). Pitts 21 remains the law in the Ninth Circuit regarding the potential mooting power of Rule 68 offers 22 on Rule 23 putative class actions. As another court in this District recently noted, “[i]t is true 23 that the Court did reject the reasoning that the Ninth Circuit in Pitts used (based on Sosna, 24 Geraghty, and Roper ) in the class action context, but it also emphasized that class actions are 25 different than collective actions. So while the Supreme Court might at some future date 26 27 28 1 While Pitts originally contained FLSA claims, by the time the case reached the Ninth Circuit the court held that “Pitts has abandoned these claims, [thus] any alleged incompatibility between a Rule 23 class action and an FLSA collective action is not present in this case.” Pitts, 653 F.3d at 1094. 5 1 actually overrule Pitts and decisions from other Circuits holding that the rule articulated in 2 Genesis also applies in class actions, as of now that has not happened, and Pitts remains good 3 law as far as the court can ascertain.” Chen, 2013 WL 2558012, at *9 (N.D. Cal. June 10, 4 2013). In sum, even if Symczyk sends “strong signals” that Pitts might not survive Supreme 5 Court review, or even “chips away” at Pitts’ reasoning, that is not enough to allow this Court 6 to decline to follow Pitts. See United States v. Green, 10-50519, slip op. at 9 (9th Cir. July 11, 7 2013). 8 C. 9 The Mootness of Plaintiff’s Individual Claims Remains in Dispute The parties hotly contest whether Plaintiff Ramirez’s individual claims have been fully Northern District of California satisfied by Defendant’s Rule 68 offer of $5001.00 and reasonable attorney fees. Defendant 11 United States District Court 10 claims that “because Plaintiff no longer retains any personal interest in the outcome of this 12 action, there is no longer any present ‘Case’ or ‘Controversy’ within the meaning of Article III 13 of the Constitution, and the claims are moot.” (Dkt. No. 87 at 1.) However, Plaintiff asserts 14 that he retains an ongoing personal interest in the outcome of the action. (Dkt. No. 91 at 4.) 15 (“Mr. Ramirez has consistently demonstrated that his individual claims in this case are not 16 mooted for a number of reasons, including because he has sought more relief than Defendant 17 has offered.”) (emphasis in original). The Court declines to decide this issue because it is not 18 essential for a ruling on the motion for reconsideration. 19 In Pitts, the plaintiff refused a Rule 68 offer of over ten times the amount he had 20 requested in his complaint. Pitts, 653 F.3d at 1085. The Ninth Circuit never explicitly stated 21 that the plaintiff’s individual claims were mooted by the Rule 68 offer, but nonetheless stated, 22 “mooting the putative class representative’s claims will not necessarily moot the class action.” 23 Id. at 1090. Instead, the Pitts court invoked the “relation-back” doctrine, which allows “the 24 named plaintiff [to] continue to represent the class until the district court decides the class 25 certification issue. Then, if the district court certifies the class, certification relates back to the 26 filing of the complaint. Once the class has been certified, the case may continue despite full 27 satisfaction of the named plaintiff’s individual claim because an offer of judgment to the 28 named plaintiff fails to satisfy the demands of the class.” Id. at 1092 (citing Sosna v. Iowa, 6 1 419 U.S. 393, 402-03 (1975)). If the district court does not certify the class, the plaintiff may 2 appeal and “[o]nly once the denial of class certification is final does the defendant’s offer—if 3 still available—moot the merits of the case because the plaintiff has been offered all that he 4 can possibly recover through litigation.” Id. (citing Sandoz v. Cingular Wireless LLC, 553 5 F.3d 913, 921 (5th. Cir. 2008)). Thus, regardless of whether Plaintiff’s individual claims may 6 be moot, under Pitts the Court may not dismiss the class action complaint for lack of subject 7 matter jurisdiction. See Chen, 2013 WL 2558012 at *11 (“With regard to whether [the 8 plaintiff’s individual] claims are moot—even if they are, under Pitts, the entire case cannot be 9 dismissed for lack of subject matter jurisdiction, and [the plaintiff] will still be able to move Northern District of California for class certification.”). The Court therefore declines to decide whether Plaintiff’s individual 11 United States District Court 10 claims have been fully satisfied by Defendant’s Rule 68 offer. 12 D. Trans Union’s Request for 1292(b) Certification 13 If it must lose its motion for reconsideration, Defendant asks the Court to certify for 14 appeal the subject matter jurisdiction question pursuant to 28 U.S.C. § 1292(b). Defendant 15 contends that “whether the mootness analysis in Symczyk overrules Pitts is a controlling 16 question of law as to which there is substantial ground for difference of opinion, and that an 17 immediate appeal from the Order may materially advance the ultimate termination of the 18 litigation.” (Dkt. No. 87 at 9.) The party seeking interlocutory appeal bears the burden of 19 showing that “exceptional circumstances justify a departure from the basic policy of 20 postponing appellate review until after the entry of a final judgment.” Coopers & Lybrand v. 21 Livesay, 437 U.S. 463, 476 (1978). Interlocutory appeal is “applied sparingly and only in 22 exceptional cases.” United States v. Woodbury, 263 F.2d 784, 788 n.11 (9th Cir. 1959). This 23 is not such a case. Defendant has failed to show that there is a substantial ground for 24 difference of opinion as to whether Symczyk overrules Pitt, especially given the high standard 25 for such a conclusion. The Court therefore DENIES the request for certification. 26 27 28 CONCLUSION Because Defendant has failed to persuade the Court that Symczyk is clearly irreconcilable with Pitts, Defendant’s motion for reconsideration is DENIED. 7 1 2 IT IS SO ORDERED. Dated: July 17, 2013 _________________________________ JACQUELINE SCOTT CORLEY UNITED STATES MAGISTRATE JUDGE 3 4 5 6 7 8 9 10 Northern District of California United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8

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