Benggio v. Professional Recovery Services, Inc.
Filing
25
ORDER denying 20 Defendant's Motion to Dismiss for Lack of Jurisdiction. In light of this ruling, 24 Plaintiff's Motion to Stay is denied as moot. See ORDER for details. Signed by Judge Robert N. Scola, Jr. on 7/18/2012. (jky)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 12-60168-Civ-SCOLA
JANICE W. BENGGIO,
Plaintiff,
vs.
PROFESSIONAL RECOVERY
SERVICES, INC.,
Defendant.
______________________________/
ORDER DENYING MOTION TO DISMISS FOR LACK OF JURISDICTION
THIS MATTER is before the Court on Defendant’s Motion to Dismiss for Lack of
Subject Matter Jurisdiction [ECF No. 20], filed by Professional Recovery Services, Inc. For the
reasons stated below, this Motion is denied.
Introduction
This case was brought pursuant to the Fair Debt Collection Practices Act (“FDCPA”) and
the Telephone Consumer Protection Act (“TCPA”). The Complaint alleges that Defendant
violated the FDCPA by leaving Plaintiff telephone messages that failed to disclose Defendant’s
identity. Plaintiff seeks statutory damages, plus attorney’s fees and costs, under the FDCPA, but
does not allege actual damages in the Complaint. The “WHEREFORE” clause of the Complaint
expressly requests that “the Court enter judgment in favor of Plaintiff and against Defendant[.]”
Compl. at 5.
On May 11, 2012, Defendant made a written settlement offer by letter to Plaintiff in the
amount of “$1,001, plus reasonable attorney’s fees and costs as determined to be recoverable by
the Court, or otherwise agreed to by the parties, to resolve the claims that have or could have
been asserted by Plaintiff against Defendant” under the FDCPA.
Settlement Letter at 1.
Defendant alternatively offered to settle the FDCPA claims in total for $3,000, inclusive of
attorney’s fees and costs. Id.
Plaintiff has not responded to Defendant’s offer. Although Plaintiff has not yet accepted
the offer, Defendant moves to dismiss for lack of subject matter jurisdiction, arguing it “has
offered one dollar more than everything that Plaintiff is entitled to under the FDCPA claim; i.e.
statutory damages of $1,001, plus reasonable attorney’s fees and costs.” Mot. at 2. According to
Defendant, in light of the settlement offer, “there is no longer a dispute over which to litigate and
this case must be dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of
Civil Procedure 12(b)(1).” Id.
Legal Standards
Article III of the United States Constitution specifically limits federal court jurisdiction to
actual cases and controversies. See U.S. Const. Art. III § 2. An action that does not present an
active case or controversy is moot; and as such, a federal court may not consider or decide the
merits of it. See Al Najjar v. Ashcroft, 273 F.3d 1330, 1336 (11th Cir. 2001); see also Nat’l
Adver. Co. v. City of Miami, 402 F.3d 1329, 1332 (11th Cir. 2005) (“a moot suit cannot present
an Article III case and controversy and the federal courts lack subject matter jurisdiction to
entertain it”). In such cases, dismissal for lack of subject matter jurisdiction is required. See
Moten v. Broward Cnty., Fla., 2011 WL 5877034, at *3 (S.D. Fla. Nov. 23, 2011) (Cohn, J.).
Under Federal Rule of Civil Procedure 12(b)(1), a defendant may contest subject matter
jurisdiction in two ways – facially or factually.
Principal Life Ins. Co. v. Alvarez, 2011 WL
4102327, at *2 (S.D. Fla. Sept. 14, 2011) (Altonaga, J.). “A facial attack asserts that a plaintiff
has failed to allege a basis for subject matter jurisdiction in the complaint,” and “the plaintiff’s
allegations are taken as true for the purposes of the motion[.]” Id. A factual attack, by contrast,
“challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and
matters outside the pleadings such as testimony and affidavits, are considered.” Id. (citation
omitted). “No presumption of truth attaches to the plaintiff’s allegations, and the existence of
disputed material facts does not prevent the trial court from evaluating for itself the merits of the
jurisdictional claim.” Id. In this case, Defendant’s challenge relates to events arising outside the
Complaint – specifically, an offer of settlement.
jurisdiction.
Therefore, this is a factual challenge to
Morrison v. Amway Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003) (motion
presented factual attack where it “did not assert lack of subject matter jurisdiction solely on the
basis of the pleadings”).
Legal Analysis
The Court finds that Defendant’s settlement offer does not moot Plaintiff’s FDCPA claim
because Plaintiff expressly seeks a judgment, which Defendant has not offered to give.
Therefore, there remains a case or controversy over which this Court has subject matter
jurisdiction.
“Courts in the Southern District of Florida, as well as in other districts, have split on the
issue of whether a mere offer of full damages moots a case.” Balthazor v. ARS Nat’l Servs., Inc.,
2011 WL 367701, at *1 (S.D. Fla. Aug. 18, 2011) (Cohn, J.). The point of disagreement seems
to be whether or not the plaintiff is entitled to a judgment, as prayed for in the complaint, even
though the defendant has offered to fully pay damages. This issue is presently on appeal before
the Eleventh Circuit in Zinni v ER Solutions, Inc., Case No. 10-cv-80780 (S.D. Fla., Apr. 20,
2011) (Ryskamp, J.) and Desty v. Collection Information Bureau, Inc., Case No. 11-80114 (S.D.
Fla. June 8, 2011) (Ryskamp, J.). The Plaintiff here represents that during oral argument in those
cases, the Eleventh Circuit “strongly indicated that it would likely hold that a settlement offer,
absent an offer allowing judgment to be entered, does not provide a plaintiff with the full
measure of relief to which he is entitled under the [FDCPA].” Stay Mot. at 1. Without
speculating on the likely disposition of Zinni and Desty in the Eleventh Circuit, this Court agrees
that a defendant cannot moot a plaintiff’s case without offering a judgment pursuant to Federal
Rule of Civil Procedure 68.
Under Rule 68, a defendant can “serve on an opposing party an offer to allow judgment
on specified terms, with the costs then accrued.” Fed. R. Civ. P. 68(a). When a plaintiff is
tendered an offer of judgment for the maximum allowable relief, it moots an FDCPA claim, even
when that offer is not accepted. Lynch v. First Nat. Collection Bureau, Inc., 2011 WL 2457903,
at *1 (S.D. Fla. Jun. 17, 2011) (Cohn, J.); Moore v. Hecker, 250 F.R.D. 682, 683 (S.D. Fla. 2008)
(Cohn, J.). “The plain purpose of Rule 68 is to encourage settlement and avoid litigation.”
Util. Automation 2000, Inc. v. Choctawhatchee Elec. Co-op, Inc., 298 F.3d 1238, 1240 (11th Cir.
2002) (citation omitted). Thus, “Rule 68 allows a defendant to make a firm, non-negotiable offer
of judgment.” Id.
A Rule 68 offer of judgment, however, is distinguishable from a mere offer of settlement,
as an offer of judgment requires that actual judgment be allowed. See, e.g., Moten v. Broward
Cnty., Fla., 2011 WL 5877034, at *3 (S.D. Fla. Nov. 23, 2011) (Cohn, J.) (finding evidence of
“attempt to settle” insufficient where “Defendant ha[d] presented no evidence that it served
Plaintiff with a Rule 68 offer of judgment.”); Balthazor, 2011 WL 367701, at *1-*2 (discussing
“whether a mere offer of full damages moots a case” and concluding that “[t]his Court does not
find that the action is moot as Plaintiff has not been afforded the relief of an enforceable
judgment”); Lynch, 2011 WL 2457903, at *2 (finding offer did not render FDCPA claim moot
where it did not include judgment against all defendants).
Defendant maintains that Plaintiff’s FDCPA claims were rendered moot by its settlement
letter, which offered her $1,001 plus reasonable attorney’s fees and court costs. The settlement
letter does not mention Rule 68, nor does it offer Plaintiff a judgment. Defendant’s Motion
likewise does not suggest that the settlement offer was made under Rule 68. Given these
circumstances, the Court finds that this offer was not an offer of judgment for the purposes of
mootness, but rather a mere settlement offer. Therefore, because Defendant has not offered to
give Plaintiff a judgment – i.e., everything Plaintiff has asked for – Defendant’s written
settlement offer does not moot Plaintiff’s FDCPA claims.
Conclusion
For the reasons explained herein, Plaintiff’s FDCPA claim is not moot. Accordingly, it is
hereby ORDERED and ADJUDGED that Defendant’s Motion to Dismiss for Lack of Subject
Matter Jurisdiction [ECF No. 20] is DENIED. In light of this ruling, Plaintiff’s Motion to Stay
Case [ECF No. 24] is also DENIED as moot.
DONE and ORDERED in chambers, at Miami, Florida on July 18, 2012.
________________________________
ROBERT N. SCOLA, JR.
UNITED STATES DISTRICT JUDGE
Copies to:
U.S. Magistrate Judge
Counsel of record
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