Fulton Dental, LLC v. Bisco, Inc.
Filing
36
MEMORANDUM Opinion and Order signed by the Honorable Edmond E. Chang. For the reasons stated in the Opinion, Defendant Bisco's motion to deposit funds with the Court 21 is granted, and the $3,600 must be deposited with the Clerk's Of fice, along with a notice of deposit (to be filed on the electronic docket), by 09/07/2016. After the funds are deposited, the Court will order the funds to be released to Fulton Dental in accordance with Rule 67(b). Upon the making of the deposit, F ulton Dental's individual and class claims will be moot, and the entire case will be dismissed under Rule 12(b)(1). After the deposit is made, judgment shall also be entered for Fulton Dental in the amount of $3,005, along with an injunctio n against Bisco to refrain from using any device to send an unsolicited facsimile advertisement to Fulton Dental, in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227(b). Fulton Dental is directed to file a Rule 54(d) bill of costs with the Court by 09/14/2016; the costs will be paid out of the remainder of the deposit. Status hearing of 09/13/2016 is vacated. Mailed notice. (pjg, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
FULTON DENTAL, LLC,
Plaintiff,
v.
BISCO, INC.,
Defendant.
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No. 15 C 11038
Judge Edmond E. Chang
MEMORANDUM OPINION AND ORDER
Fulton Dental, LLC filed a class action complaint, alleging that Bisco, Inc.
sent it unsolicited fax advertisements in violation of the Telephone Consumer
Protection Act.1 Fulton Dental seeks statutory, injunctive, and declaratory relief for
both itself and for members of the proposed class. After Fulton Dental rejected a
settlement offer, Bisco filed this motion to deposit $3,600 with the Court under
Federal Rule of Civil Procedure 67. Bisco also asked the Court to enter judgment
against it in the amount of $3,005 plus any accrued costs, and to enjoin Bisco from
sending Fulton Dental any future unsolicited faxes. Bisco’s unconditional surrender
to Fulton Dental has a purpose: Bisco is trying to moot the case so that the class
claims cannot proceed. As this Opinion explains, Fulton Dental could have thwarted
Bisco’s gambit by filing an early motion for class certification. But it did not. So, for
the reasons explained below, Bisco’s motion to deposit funds is granted. As a result,
1The
Court has subject matter jurisdiction over this case under 28 U.S.C. § 1331 and
47 U.S.C. § 227 et seq. (the TCPA).
Fulton Dental’s individual and class claims are both moot, and the case is dismissed
for lack of jurisdiction under Fed. R. Civ. P. 12(b)(1).
I. Background
Fulton Dental is a private dental practice in Birmingham, Alabama. R. 1,
Compl. ¶¶ 1-2.2 It alleges that on July 9, 2015, it received an unwanted fax
advertisement from Bisco, an Illinois corporation. Id. ¶¶ 3, 13, 24. The fax promoted
Bisco’s dental products and services, encouraging recipients to “[b]uy a product
never before purchased, [and] receive 10% OFF your TOTAL ORDER!” Id. ¶¶ 15,
17. It also included contact information for Steve Wolf, a Bisco sales territory
manager. Id. ¶¶ 18-20. The fax, which was a form document that was not addressed
to anyone in particular, did not include an opt-out notice allowing the recipient to
request the sender to stop sending faxes. Id. ¶¶ 16, 23, 25. Bisco’s actions allegedly
invaded Fulton Dental’s privacy rights and jammed its fax lines so that it could not
receive other legitimate faxes. Id. ¶ 21. Fulton Dental also claims that it suffered
damages in the form of paper and toner costs. Id. ¶ 22.
On behalf of itself and members of a proposed class, Fulton Dental alleges
that Bisco violated the Telephone Consumer Protection Act (TCPA) in two ways: (1)
by sending unwanted junk faxes; and (2) by failing to include an opt-out notice in
those faxes. Id. ¶¶ 39-44. In that vein, Fulton Dental seeks to represent two classes:
an “unsolicited advertisement class” of plaintiffs who received unsolicited faxes from
December 8, 2011 (four years before the complaint was filed) to the date of class
2Citations
to the record are noted as “R.” followed by the docket number and the
page or paragraph number.
2
certification, and an “opt out notice class” of all plaintiffs who received, during the
same time period, unsolicited faxes that did not contain an opt-out notice. Id. ¶ 31.
Fulton Dental seeks injunctive relief to prevent Bisco from sending future
unsolicited faxes, id. ¶¶ 45-46, and from “altering, deleting or destroying any
documents or records that could be used to identify the class members,” id. at 8, ¶¶
2, 5. Fulton Dental also seeks a declaration that the fax it received violated the
TCPA, and statutory damages of up to $500 for each negligent violation or $1,500
for each willful violation of the statute. Id. ¶ 4; id. at 8, ¶¶ 1, 4; see also 47 U.S.C. §
227(b)(3). Although Fulton Dental’s “prayer for relief” also seeks class certification,
id. at 8 ¶ 3, it has not yet filed a motion for class certification—a failure that turns
out to be fatal, as discussed later in the Opinion.
On January 18, 2016, a little over a month after Fulton Dental filed its
complaint, Bisco made a settlement offer of $3,005 plus costs, which Fulton Dental
rejected on January 24. R. 21, Def’s Mot. to Deposit Funds ¶ 2. The next day, Bisco
moved to deposit $3,600 with this Court under Federal Rule of Civil Procedure 67.
See generally id. Bisco’s position is that this amount exceeds what Fulton Dental
could ever hope to recover in this action, because it assumes maximum liability:
$3,005 for two willful violations of the TCPA—one for sending an unwanted junk
fax, and one for failing to include an opt-out notice (remember, the TCPA imposes
$1,500 per willful violation)—and $595 to cover costs. Id. ¶ 2. Bisco also asks the
Court to enter judgment in Fulton Dental’s favor for $3,005, to enjoin Bisco from
further activity that violates the TCPA, and to direct Futon to file a bill of costs. Id.
3
¶ 9; R. 24, Def.’s Br. at 6. After Bisco’s motion, the Court requested briefing from
both parties on the applicability of Rule 67 to this case, and on why depositing the
funds with the Court should result in the entry of judgment. R. 23, 1/26/16 Minute
Entry. In its brief, Bisco argued that this deposit, if allowed, would moot the entire
case. Def.’s Br. at 5.
II. Legal Standard
A. Rule 67
Rule 67 provides that “[i]f any part of the relief sought is a money judgment
or the disposition of a sum of money or some other deliverable thing, a party—on
notice to every other party and by leave of court—may deposit with the court all or
part of the money or thing, whether or not that party claims any of it.” Fed. R. Civ.
P. 67(a). Once a court grants a Rule 67 motion, those funds “must be deposited in an
interest-bearing account or invested in a court-approved, interest bearing
document.” Fed. R. Civ. P. 67(b). Generally, “[t]he purpose of Rule 67 is to relieve
the depositor of responsibility for a disputed fund while the parties litigate its
ownership.” Engineered Med. Sys., Inc. v. Despotis, 2006 WL 1005024, at *2 (S.D.
Ind. Apr. 14, 2006) (allowing plaintiff to deposit royalty payments with the court
during dispute about a patent licensing agreement); 12 Charles Alan Wright &
Arthur R. Miller, § 2991 (2d ed. 1997) (“The purpose of the deposit is to relieve the
depositor of responsibility for a fund in dispute.”). For example, Rule 67 can be used
in interpleader actions, most commonly when an insurance company deposits an
insurance payout with the court, leaving the claimants to argue about who is
4
entitled to the funds. E.g., The Sportsman’s Guide, Inc. v. Havana Nat. Bank, 2009
WL 4923092, at *3 (C.D. Ill. Dec. 7, 2009) (in interpleader actions, “the holder of the
fund may put the money … in dispute into court, withdraw from the proceeding,
and leave the claimants to litigate between themselves the ownership of the fund in
court” (citation and quotations omitted)); Am. Skandia Life Assur. Corp. v. McCarty,
2007 WL 3232496, at *1 (C.D. Ill. Nov. 1, 2007) (permitting insurance company to
deposit annuity payment under Rule 67, as claimants disputed ownership of the
death benefits). Overall, the Court has broad discretion in determining whether to
grant a Rule 67 motion. See Maher Eng’g Co. v. Screwmatics of S. Carolina, Inc.,
2014 WL 4979167, at *1 (N.D. Ill. Oct. 6, 2014); Engineered Med. Sys., Inc., 2006
WL 1005024, at *2.
B. Rule 12(b)(1)
Bisco has not explicitly invoked Federal Rule of Civil Procedure 12(b)(1), but
it argues that if it is allowed to deposit $3,600 under Rule 67, then Fulton Dental’s
individual and class claims would both be moot, leaving the Court with no live case
or controversy. Def.’s Br. at 5. A moot case, in turn, would require a Rule 12(b)(1)
dismissal for lack of subject matter jurisdiction.
When evaluating a dismissal for lack of jurisdiction under Rule 12(b)(1), a
court initially must accept all well-pled allegations as true and draw reasonable
inferences in the plaintiff’s favor. Ezekiel v Michel, 66 F.3d 894, 897 (7th. Cir. 1995)
(citation omitted). But the court may “look beyond the jurisdictional allegations of
the complaint and view whatever evidence has been submitted on the
5
issue.” Id. (quotations omitted) (quoting Capital Leasing Co. v. Fed. Deposit Ins.
Corp., 999 F.2d 188, 191 (7th Cir. 1993)). Mootness is evaluated under Rule 12(b)(1)
because it involves constitutional limits on the jurisdiction of federal courts. U.S.
Const. art. III, § 2. Article III authorizes jurisdiction only over a live case or
controversy, and demands that the parties maintain a personal stake in the case
“through all stages of federal judicial proceedings, trial and appellate.” Spencer v.
Kemna, 523 U.S. 1, 7 (1998) (citations and quotations omitted). A case becomes
moot, then, when the plaintiff no longer “suffer[s], or [is no longer] threatened with,
an actual injury traceable to the defendant and likely to be redressed by a favorable
judicial decision.” Id. (citation and quotations omitted). And when there is nothing
left to litigate, a dismissal is appropriate under Rule 12(b)(1) because the plaintiff
“has no remaining stake” in the case. Holstein v. City of Chicago, 29 F.3d 1145, 1147
(7th Cir. 1994) (citation and quotations omitted).
III. Analysis
This case presents several tough questions. First, does Rule 67 permit Bisco
to deposit the proposed $3,600 with the Court? If so, do these funds afford full relief
to Fulton Dental such that it no longer has a personal stake in the litigation,
rendering its individual TCPA claims moot? And if Fulton Dental’s individual
claims are moot, are the class action claims moot as well? The Court addresses each
question below and answers each with a “yes.”
6
A. Rule 67
Bisco seeks permission to deposit $3,600 with this Court under Rule 67.
According to Bisco, this sum represents the maximum amount of damages and fees
that Fulton Dental could possibly recover for its TCPA claims. Bisco’s motivation is
no secret: it wants to moot Fulton Dental’s individual and class claims. See
generally Def.’s Br.
There is very little Seventh Circuit authority on the infrequently litigated
Rule 67. In general, it is used “to relieve the depositor of responsibility for a
disputed fund while the parties litigate its ownership.” Engineered Med. Sys., Inc.,
2006 WL 1005024, at *2. As mentioned above, Rule 67 is commonly used in
interpleader actions, when “the holder of the fund may put the money … in dispute
into court, withdraw from the proceeding, and leave the claimants to litigate
between themselves the ownership of the fund in court.” The Sportsman’s Guide,
Inc., 2009 WL 4923092, at *3 (citation and quotations omitted). For example, an
insurance company can deposit an insurance payout with the court, leaving the
claimants to litigate over the priority and ownership of those benefits. See McCarty,
2007 WL 3232496, at *1 (permitting insurance company to deposit annuity
payments under Rule 67 until dispute over entitlement to funds was resolved). Few
standards govern the court’s discretion to grant Rule 67 deposits, but courts
generally agree that the deposited funds must truly be in dispute. See United States
v. Jupiter Aluminum Corp., 2010 WL 1881453, at *2 (N.D. Ind. May 10, 2010)
(defendant could not deposit penalties with the court, rather than directly pay the
7
plaintiff, because the district court had already determined the amount and validity
of the penalties on two prior occasions); Suraleb, Inc. v. Prod. Ass’n “Minsk Tractor
Works,” Republic of Belarus, 2007 WL 551568, at *2-3 (N.D. Ill. Feb. 20, 2007) (Rule
67 did not allow a party to deposit funds ordered by an arbitration award, because
there was no real dispute over the funds, as the arbitrator had already entered
judgment and determined the funds’ legal ownership). This requirement seems to
restrain courts from unnecessary intervention when there is no actual dispute
between the parties. See Surelab, 2007 WL 551568, at *2 (N.D. Ill. Feb. 20, 2007)
(court should not “supervise the transfer of … assets” when there is no dispute
about their ownership).
Rule 67 can also be “useful in cases of … tender of an undisputed sum.” 12
Charles Alan Wright & Arthur R. Miller, § 2991. (“Undisputed” in this sense refers
not to the funds’ legal status, but to their amount.) Courts have used Rule 67 in
cases like this one, where a defendant wished to hand over money to satisfy the
plaintiff’s claim. For example, in Brause, an early case interpreting Rule 67, an
insurance company tendered $5,000 to the plaintiffs, who sued for that amount in
building losses under an insurance policy. Brause v. Travelers Fire Ins Co, 19 F.R.D.
231, 233 (S.D.N.Y. 1956). Even though the plaintiffs refused this tender, the court
permitted the deposit, concluding that “[t]here does not appear to be any reason
why this motion should not be granted.” Id. at 235. Rule 67 permits tenders and
deposits even when the defendant does not admit liability or disclaim all of its
interests in the money; the rule was modified in 1983 to allow for “situations in
8
which a litigant may wish to be relieved of responsibility for a sum or thing, but
continue[s] to claim an interest in all or part of it.” Fed. R. Civ. P. 67 advisory
committee’s notes to 1983 amendment. The amendments responded to earlier cases
that misconstrued Rule 67 by “permit[ting] deposit only when the party making it
claims no interest in the fund or thing deposited.” Id. In one of these earlier cases,
the defendant was not permitted to deposit disputed rents in an action about the
validity of a sublease, because the defendant “still clings to its affirmative defenses
which are directly relevant to the issue of whether there is in fact an obligation to
pay.” Blasin-Stern v. Beech-Nut Life Savers Corp., 429 F. Supp. 533, 535 (D. P.R.
1975). In another, the court did not allow the defendant to deposit money allegedly
owed in a contract dispute with plaintiff, when “[d]efendant is not seeking to rid
itself of responsibility for a sum of money which it concededly owes to someone.
Defendant’s difficulty stems from its reluctance to commit itself as to whether it
owes the money at all.” Dinkins v. General Aniline & Film Corp., 214 F. Supp. 281
(S.D.N.Y. 1963). The 1983 amendments clarified that Rule 67 deposits should be
allowed in situations like Blasin-Stern and Dinkins, where a defendant wishes to
tender money to satisfy a plaintiff’s claim despite maintaining that she does not
legally owe the sum.
Ultimately, “[u]nder the plain language of Rule 67, the circumstances in
which a party might be allowed to deposit money with the court are quite broad.”
Engineered Med. Sys., Inc., 2006 WL 1005024, at *3; see also Kansas City S. Ry. Co.
v. Borrowman, 2009 WL 3188305, at *4 (C.D. Ill. Sept. 30, 2009) (“Whether to grant
9
leave for such a deposit is solely within the Court’s discretion.” (citations omitted)).
In deciding a Rule 67 motion, courts may also consider “whether the amount sought
to be deposited was definite; whether the funds could be deposited all at once or
whether there would be repeated deposits that would impose an undue burden on
the clerk of court; and whether the party seeking leave to deposit the funds had
demonstrated a likelihood of success on the merits.” Borrowman, 2009 WL 3188305,
at *4 (citations omitted). For example, deposits that “could involve a substantial
sum of money and could entail an ongoing series of deposits” may be rejected
because they would “impose an unnecessary burden upon the clerk of the court.”
Design Ben. Plans, Inc. v. Enright, 940 F. Supp. 200, 207 (N.D. Ill. 1996).
In this case, Bisco seeks to deposit $3,600 with the Court: $3,005 to cover the
maximum amount of damages allowed by the TCPA, and $595 for potential costs.
The Court holds that Rule 67 permits this deposit. First, the deposit fits within the
plain language of the rule, which allows deposits of “all or part of the money or
thing” if “any part of the relief sought is a money judgment or the disposition of a
sum of money.” Fed. R. Civ. P. 67(a). And in this TCPA action, part of Fulton
Dental’s desired relief is money in the form of statutory damages. Compl. ¶¶ 39-44.
In addition, Bisco’s tender is consistent with Brause and Rule 67’s 1983
amendments, which allow for “situations in which a litigant may wish to be relieved
of responsibility for a sum or thing, but continue[s] to claim an interest in all or part
of it.” Fed. R. Civ. P. 67 advisory committee’s notes to 1983 amendment. As the
amendments show, a deposit is permissible even though Bisco has not admitted
10
liability under the TCPA or conceded that Fulton Dental is legally entitled to these
funds. Id.; see also Engineered Med. Sys., Inc., 2006 WL 1005024, at *3 (allowing a
Rule 67 deposit “as long as the money is truly in dispute”).
The discretionary factors in this case also point towards permitting the
deposit. For one, “the amount sought to be deposited [is] definite”—$3,600.
Borrowman, 2009 WL 3188305, at *4. And there is no dispute that this sum, which
includes $3,005 for statutory damages and $595 for costs, provides more than
Fulton Dental’s maximum statutory recovery for its individual claims. Individuals
who sue under the TCPA, which regulates solicitations by telephones and other
automated equipment, can obtain (1) an injunction; (2) the amount of actual loss or
$500 in statutory damages, whichever is greater; or (3) both. 47 U.S.C. § 227(b)(3).
The actual loss, or $500, whichever is greater, can be tripled if there is a willful
violation of the statute. Id. Fulton Dental alleges receiving only one unsolicited fax.
Compl. ¶¶ 13-25. It also alleges that Bisco violated the TCPA twice, at the most—
once for sending this unsolicited fax, and another time for failing to include opt-out
information in this fax. Id. Because Fulton Dental does not allege that it lost more
than $500 in paper and toner costs for receiving one junk fax, and instead pursues
statutory damages, it would recover $500 for each negligent violation (instead of
actual damages). 47 U.S.C. § 227(b)(3)(B). And even assuming that Bisco acted
willfully, the most Fulton Dental could actually recover is $1,500 for each violation,
for a maximum total of $3,000. Id. § 227(b)(3)(C). So the amount sought to be
deposited—$3,600—is not only definite, but undisputedly covers all of Fulton
11
Dental’s statutory damages. Finally, as to the other discretionary factors, this is not
a case where there would be repeated deposits that would unduly burden the clerk’s
office. C.f., Design Ben. Plans, Inc., 940 F. Supp. at 207 (denying plaintiff’s motion
to deposit disputed funds because the amount and number of deposits was unclear,
and could exceed over four million dollars).
Fulton Dental’s primary objection to this deposit is that Rule 67 is a
“procedural device” that cannot be used to transform the parties’ substantive rights.
R. 25, Pl.’s Resp. at 4-6 (citing Maher Eng’g, 2014 WL 4979167, at *1 (“[I]t is wellsettled that Rule 67 … shall not abridge, enlarge or modify any substantive right[.]”
(quoting LTV Corp. v. Gulf States Steel, Inc. of Ala., 969 F.2d 1050, 1063 (D.C. Cir.
1992)) (quotations omitted)). Although the parties’ briefs leave much to be desired
on this issue (and most others as well), the crux of this argument seems to be that a
deposit should not be permitted if it results in substantive consequences—such as
mootness—on the plaintiff. The limited authority on Rule 67, however, shows the
opposite: a deposit is permissible even if it results in substantive effects on the
parties. For example, courts have held that a Rule 67 deposit can stop the running
of prejudgment interest (or some other form of interest on a principal-liability
amount). E.g. Lich v. Cornhusker Cas. Co., 774 F. Supp. 1216, 1223 n.5 (D. Neb.
1991) (defendant’s deposit stopped the running of prejudgment interest where the
defendant had conceded liability on a bond and deposited the face value of the bond
into the court’s registry); see also Maher Eng’g, 2014 WL 4979167, at *2 (noting that
“[i]t is true that a few courts have allowed Rule 67 deposits to stop the running of
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interest under certain circumstances” (citing cases));3 12 Charles Alan Wright &
Arthur R. Miller, § 2991 (“Under some circumstances it may suffice to stop the
running of interest.” (citing cases)). In fact, the 1983 amendments to Rule 67 were
made in direct response to earlier cases like Blasin-Stern, which held that
“[n]othing in [Rule 67] provides for the stopping of interest accrual upon deposit in
court.” 429 F. Supp. at 534; Fed. R. Civ. P. 67 advisory committee’s notes to 1983
amendment. The amendments thus clarified that the stopping of interest accrual—
an action that has a substantive effect on the parties’ claims and defenses—was a
permissible use of Rule 67.
Similarly, in other cases, a Rule 67 deposit was deemed to satisfy a litigant’s
legal obligations. For example, in Borrowman, the district court for the Central
District of Illinois held that the plaintiffs’ deposit of disputed tax payments put
them in compliance with their tax obligations so that the plaintiffs “will have
fulfilled their respective obligations to the [state tax commissioners] until this
matter is resolved.” Borrowman. 2009 WL 3188305, at *6. The court cited to Gulf
States Utilities, a Fifth Circuit case where the plaintiff challenged its electricity
contract but was permitted to avoid breach by depositing payments under Rule 67.
Id. at *4 (citing Gulf States Util. Co. v. Alabama Power Co., 824 F.2d 1465, 1475
3To
be sure, Maher Engineering also held that the defendant could not deposit sales
commissions (the subject of the dispute in that case) under Rule 67 because this “would
alter the system [of punitive damages that] Illinois has created to punish and deter
undesirable conduct toward sales representatives.” Maher Eng’g, 2014 WL 4979167, at *2.
It was not clear why a deposit would affect the plaintiff’s ability to recover punitive
damages under the Illinois Sales Representative Act. In any event, as noted above, the
court did acknowledge that Rule 67 may be used “to stop the running of interest under
certain circumstances.” Id. at *2.
13
(5th Cir.), amended on other grounds, 831 F.2d 557 (5th Cir. 1987)). The appellate
court held that there was “no reason to force [the plaintiff]” to withhold money and
be in breach during the pendency of the lawsuit. Gulf States Util. Co., 824 F.2d at
1475; but see Engineered Med. Sys., Inc. v. Despotis, 2007 WL 1021866, at *7 (S.D.
Ind. Mar. 30, 2007) (plaintiff was in breach because it did not pay royalties to
defendant, even when it deposited royalties with the court during the pendency of
litigation). The approach taken by Borrowman and Gulf States is consistent with
the 1983 amendments, which allow the depositing party to “be relieved of
responsibility for a sum or thing, [while] continu[ing] to claim an interest in all or
part of it.” Fed. R. Civ. P. 67 advisory committee’s notes to 1983 amendment. As
noted earlier, these amendments were enacted in response to cases like Dinkins,
which previously suggested that Rule 67 was limited to interpleader actions.
Dinkins, 214 F. Supp. at 283. In Dinkins, the plaintiff sued for tortious interference
of contract, and the defendant counterclaimed for breach of contract. Id. at 282. The
court held that the defendant could not deposit the money it allegedly owed to the
plaintiff under the contract, because Rule 67 could not be used “to preserve all [of]
[defendant’s] rights under the contract and to avoid the risk of a breach of contract
on its part if its position should turn out to be wrong.” Id. at 283. In response, the
1983 amendments clarified that this interpretation was too limited; Rule 67 is not
restricted to interpleader actions, and it can be used even when legal consequences
may flow from the deposit—like avoiding breach of contract during litigation. Thus,
14
the Court must reject Fulton Dental’s argument that, simply because the deposit
may have mootness consequences, Rule 67 categorically prohibits Bisco’s deposit.
In a similar vein, Fulton Dental argues that allowing the deposit would affect
its substantive right to litigate this case as a class action. Pl.’s Resp. at 5. In other
words, if the deposit is allowed, and the case becomes moot, then Fulton Dental
would be denied the opportunity to pursue class certification and obtain class-wide
relief. Id. Fulton Dental bases its argument on one Supreme Court statement in
Campbell-Ewald 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 Co. v. Gomez, 136 S. Ct. 663, 672 (2016); Pl.’s Resp. at 2. To
evaluate the impact of this statement (or lack of it) on the issue at hand, it is
necessary to understand Campbell-Ewald. In that case, the Supreme Court held
that an unaccepted or lapsed settlement offer under Rule 68 cannot moot a named
plaintiff’s individual claims, and thus the rejected offer did not prevent him from
pursuing either his individual or class claims. Id. The Court relied on the plain
language of Rule 68, which states that after fourteen days, “[a]n unaccepted offer is
considered withdrawn,” Fed. R. Civ. P. 68(b), leaving the parties back in their
original positions, Campbell-Ewald, 136 S. Ct. at 660. Similarly, “basic principles of
contract law” instructed that a “Rule 68 offer of judgment, once rejected, had no
continuing efficacy.” Id. (citing Genesis Healthcare Corp. v. Symczyk, 133 S. Ct.
1523, 1533 (2013) (Kagan, J., dissenting)). So the plaintiff still had a live claim:
15
“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 671.
Although Fulton Dental frames its argument—that it cannot be denied the
right to litigate a class action—on the dictates of Rule 67 itself, Fulton Dental is
really making an anti-mootness argument: that a defendant’s tender of relief, when
deposited with the court, should not moot her individual or class claims. Fulton
Dental’s citation to Campbell-Ewald—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,” id. at 672 (emphasis added)—begs the question: does a deposit of a
full tender of relief leave Fulton Dental with a live claim of its own? Are Fulton
Dental’s individual and class claims moot? The Court addresses these issues in the
next section, which discusses mootness, see infra Sections III.B-III.C, because the
arguments do not go to the narrower question of whether Rule 67 permits Bisco to
deposit funds with the court in the first place.
Before turning to mootness, the Court acknowledges the wide disagreement
on the applicability of Rule 67 to proposed class actions like this one. On the one
hand, some courts agree that Rule 67 permits the court to deposit tenders from the
defendant to the plaintiff. E.g., S. Orange Chiropractic Ctr., LLC v. Cayan LLC,
2016 WL 1441791 (D. Mass. Apr. 12, 2016), motion to certify appeal denied, 2016
WL 3064054 (D. Mass. May 31, 2016) (permitting defendant to deposit funds with
the court and entering judgment in plaintiff’s favor, which mooted the plaintiff’s
individual claims); Leyse v. Lifetime Entm’t Servs., LLC, 2016 WL 1253607
16
(S.D.N.Y. Mar. 17, 2016) (same). Other courts, however, have denied Rule 67
motions based on disapproval of the defendant’s motivations to settle with the
named plaintiffs, moot the case, and avoid class litigation. E.g., Brady v. Basic
Research, L.L.C., 312 F.R.D. 304, 306 (E.D.N.Y. 2016) (denying Rule 67 motion
because “Defendants[] seek … to deposit funds into court to moot this case [and] not
to relieve themselves of the burden of administering an asset,” and because of “the
Supreme Court’s 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’” (citations and quotations omitted)); Radha Giesmann, MD, P.C. v. Am.
Homepatient, Inc., 2016 WL 3407815, at *3 (E.D. Mo. June 16, 2016) (allowing Rule
67 deposit “would essentially [give Defendant] control of the putative class action,”
but “[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” (citations and
quotations omitted)); Tegtmeier v. PJ Iowa, L.C., — F. Supp. 3d. —, 2016 WL
3265711, at *10 (S.D. Iowa May 18, 2016) (“[t]hough the Court may allow such a
deposit,” it ultimately declined to do so because “[the Eighth Circuit] has
disapproved of efforts to ‘pick off’ individual plaintiffs in an effort to thwart class
certification” (citations omitted)); Bridging Communities, Inc. v. Top Flite Fin., Inc.,
— F. Supp. 3d —, 2016 WL 1388730, at *4 (E.D. Mich. Apr. 6, 2016) (“Top Flite is
improperly using Fed. R. Civ. P. 67 to moot Plaintiffs’ standing to continue the
appeal of the denial of class certification,” but “Rule 67 may not be used to effect a
17
legal transfer of property between litigants.”); Bais Yaakov of Spring Valley v.
Varitronics, LLC, 2016 WL 806703, at *1 (D. Minn. Mar. 1, 2016) (“As there is no
purpose to the deposit … other than to moot the case, and as Plaintiff has not yet
had a fair opportunity to show that class certification is warranted … the motion
should be [denied].”).
The Court, however, declines to apply a categorical bar under Rule 67. First,
Rule 67’s text does not mention a defendant’s litigation motivations as a relevant
consideration. So without any case-law authority, the Court cannot hold that Rule
67 draws the line at defendants in a proposed class action who wish to tender relief
to a named plaintiff. Indeed, as discussed earlier, the 1983 amendments to Rule 67
suggest that deposits are permitted even if they have substantive effects on the
parties’ legal positions. All that is needed for a Rule 67 deposit is that “any part of
the relief sought is a money judgment or the disposition of a sum of money or some
other deliverable thing.” Fed. R. Civ. P. 67(a). That requirement is met here. Other
factors also favor allowing the deposit because the proposed sum is definite, in
dispute, and would not create an undue burden. So Bisco’s motion to deposit $3,600
with the Court is granted.
B. Are Fulton Dental’s Individual Claims Moot?
Having decided that Rule 67 permits Bisco to make this deposit, the Court
next analyzes the consequences of the deposit on (1) Fulton Dental’s individual
claims; and (2) Fulton Dental’s class claims. The Court begins with whether the
deposit moots Fulton Dental’s individual claims.
18
The mootness requirement comes from Article III of the Constitution, which
limits federal-court jurisdiction to “cases” and “controversies.” U.S. Const. art. III, §
2. There are two “aspects” of mootness: “(1) whether the issues presented are still
‘live,’ and (2) whether the parties have a legally cognizable interest in the outcome
(‘personal stake’).” Davis v. Ball Mem’l Hosp. Ass’n, Inc., 753 F.2d 1410, 1416 (7th
Cir. 1985) (quoting U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 396 (1980)). In a
class action, the first aspect requires a “live” issue between the class (or the
proposed class) and the defendants. Id. For example, “[e]vidence that the issues are
‘live’ may be found from the attempted intervention by unnamed class members” or
from the “certification of a class.” Id. (citations omitted). The second element
requires “the named plaintiffs [to] show a personal stake in the outcome of the
controversy” so that there exists a “dispute which touch[es] the legal relations of
parties having adverse legal interests.” Id. (citations and quotations omitted). This
personal-stake requirement “serves primarily the purpose of assuring that federal
courts are presented with disputes they are capable of resolving.” Geraghty, 445
U.S. at 397. In that way, mootness is like “standing set in a time frame: The
requisite personal interest that must exist at the commencement of the litigation
(standing) must continue throughout its existence (mootness).” Id. (citations and
quotations omitted).
1. Effect of Tender and Deposit
When discussing whether Fulton Dental’s individual claims are mooted, the
pertinent question is whether Fulton Dental still has a live claim against Bisco and
19
a personal stake in the litigation after receiving full relief through the Rule 67
deposit.
Two recent Supreme Court cases provide some context. In Genesis
Healthcare, the plaintiff brought a collective action under the Fair Labor Standards
Act4 for uncompensated work. Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523,
1527 (2013). After answering the complaint, and before anyone had opted into the
collective action, the defendants made the plaintiff a settlement offer under Rule 68
for unpaid wages, fees, and costs; the plaintiff did not respond. Id. The defendants
then argued that the plaintiff’s case was moot because they offered her complete
relief. Id. The Supreme Court “assume[d], without deciding, that [defendants’] Rule
68 offer mooted respondent’s individual claim,” and moved on to the next question:
whether the collective action “is justiciable when the lone plaintiff’s individual claim
becomes moot.” Id. at 1529. The Supreme Court concluded that “[i]n the absence of
any claimant’s opting in, [plaintiff’s] suit became moot when her individual claim
became moot, because she lacked any personal interest in representing others in
this action. While the FLSA authorizes an aggrieved employee to bring [a collective]
action … the mere presence of collective-action allegations in the complaint cannot
save the suit from mootness once the individual claim is satisfied.” Id. In dissent,
4The
FLSA collective action is “similar to, but distinct from the typical class action
brought pursuant to Fed. R. Civ. P. 23. The princip[al] difference is that plaintiffs who wish
to be included in a collective action must affirmatively opt-in to the suit by filing a written
consent with the court, while the typical class action includes all potential plaintiffs that
meet the class definition and do not opt-out.” Alvarez v. City of Chicago, 605 F.3d 445, 448
(7th Cir. 2010); 29 U.S.C. § 216(b). Genesis Healthcare also cautioned that “there are
significant differences between certification under Federal Rule of Civil Procedure 23 and
the joinder process under § 216(b).” 133 S. Ct. at 1528 n.1.
20
Justice Kagan said that the majority’s “assumption” was incorrect: “an unaccepted
offer of judgment cannot moot a case. When a plaintiff rejects such an offer—
however good the terms—her interest in the lawsuit remains just what it was
before. And so too does the court’s ability to grant her relief. An unaccepted
settlement offer—like any unaccepted contract offer—is a legal nullity, with no
operative effect.” Id. at 1533 (Kagan, J., dissenting).
A few years later, Campbell-Ewald decided the question left unanswered in
Genesis Healthcare: whether an unaccepted, expired Rule 68 offer moots an
individual’s claims. Campbell-Ewald, 136 S. Ct. at 670. The majority said no,
adopting the reasoning of Justice Kagan’s Genesis Healthcare dissent. Id. The
majority in Campbell-Ewald relied on the plain language of Rule 68, which states
that after fourteen days, “[a]n unaccepted offer is considered withdrawn,” Fed. R.
Civ. P. 68(b), leaving the parties back in their original positions, Campbell-Ewald,
136 S. Ct. at 670. Similarly, “basic principles of contract law” instructed that an
“offer of judgment, once rejected, had no continuing efficacy.” Id. (citing Genesis
Healthcare, 133 S. Ct. at 1533 (Kagan, J., dissenting)). So the plaintiff still had an
Article III interest: “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. In so deciding, the Supreme Court added that “[it] need not, and do[es]
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. That question
21
is appropriately reserved for a case in which it is not hypothetical.” Id. at 672. The
concurrence and dissent hinted that this situation would produce a different result.
See id. at 675-76 (Thomas, J., concurring) (differentiating between a “mere offer”
and a common-law tender “accompanied by actually produc[ing] the sum at the time
of tender in an unconditional manner” (citations and quotations omitted)); Id. at 680
(Alito, J., dissenting) (“[T]o the extent there is a question whether Campbell is
willing and able to pay, there is an easy answer: have the firm deposit a certified
check with the trial court.”); Id. at 684 (Roberts, C.J., dissenting) (“The most
straightforward way is simply to pay over the money. The defendant might hand
the plaintiff a certified check or deposit the requisite funds in a bank account in the
plaintiff’s name. … Alternatively, a defendant might deposit the money with the
district court … on the condition that the money be released to the plaintiff when
the court dismisses the case as moot.” (citations omitted)).
Bisco, along with other class-action defendants, is now testing that
hypothetical in Campbell-Ewald. Some courts agree that a tender of full relief in the
form of a Rule 67 deposit moots the individual’s claims, because the “Defendant has
already fallen on its sword in unconditional surrender … .” S. Orange Chiropractic
Ctr., 2016 WL 1441791, at *4-5 (“I conclude that 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.”); Leyse, 2016 WL 1253607, at *2
(“[A] defendant’s deposit of a full settlement with the court, and consent to entry of
22
judgment against it, will eliminate the live controversy before a court.” (citations
omitted)). The concept of tender comes from state common law; in Illinois, “courts
routinely have held that [t]ender is an unconditional offer of payment consisting of
the actual production of a sum not less than the amount due on a particular
obligation.” Telemark Dev. Grp., Inc. v. Mengelt, 313 F.3d 972, 978 (7th Cir. 2002)
(quoting Brown & Kerr, Inc. v. American Stores Prop., Inc., 715 N.E.2d 804, 812 (Ill.
App. Ct. 1999)) (quotations omitted). So there is a difference between a tender—“an
unconditional offer and an actual production of the money to be paid”—and a Rule
68 “offer to tender payment in the future.” Id. (emphases added) (because plaintiff
“did not actually produce the money to satisfy its obligation under the note” by
sending “cash, a check or otherwise transfer[ring] funds,” there was no tender); see
also Campbell-Ewald, 136 S. Ct. at 675 (Thomas, J., concurring) (a Rule 68
settlement offer is unlike a tender because the latter is actually “accompanied by
actually produc[ing] the sum at the time of tender in an unconditional manner”). In
other words, “a tender is … an irrevocable transfer of title to funds from the
defendant to the plaintiff made without regard to the outcome of the lawsuit and
without requiring any reciprocal action by the plaintiff.” Brief for the American
Federation of Labor and Congress of Industrial Organizations as Amicus Curiae
Supporting Respondents at 3, Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2013).
Here, Bisco is not simply making an offer for future relief—it is actually
attempting to hand over funds now and asking for judgment to be entered against
it, in the form of both monetary and injunctive relief. See Def’s Mot. to Deposit
23
Funds. This unconditional surrender backed by immediate action means that Bisco
“has thus thrown in the towel [so] there is nothing left for the district court to do
except enter judgment.” Leyse, 2016 WL 1253607, at *2 (citation and quotations
omitted). And it does not matter that Fulton Dental has not consented to the deposit
(nor does Fulton Dental argue that consent is relevant), just as it does not matter
whether a plaintiff consents to judgment being entered in its favor. Indeed, the
Genesis Healthcare dissent (remember, Campbell-Ewald adopted the overall
reasoning of that dissent) acknowledged that “a court has discretion to halt a
lawsuit by entering judgment for the plaintiff when the defendant unconditionally
surrenders and only the plaintiff’s obstinacy or madness prevents her from
accepting total victory.” Genesis Healthcare, 133 S. Ct. at 1536 (Kagan, J.,
dissenting). Bisco has unconditionally surrendered on Fulton Dental’s individual
claims, so those claims are no longer live.5
2. Complete Relief
Fulton Dental responds that the Court should not enter judgment for it
because Bisco has not offered all the relief requested in the complaint—namely,
Bisco continues to deny liability and its offer for an injunction has expired. Pl.’s
Resp. at 7-9, 14. It is true that judgment should be entered for the plaintiff,
5Some
courts believe that there is no difference between a Rule 68 offer and an
immediate tender under Rule 67. E.g., Ung v. Universal Acceptance Corp., 2016 WL
3136858, at *5 (D. Minn. June 3, 2016) (“[I]n this Court’s view there is no principled
difference between a plaintiff rejecting a tender of payment and an offer of payment[.]”).
But Campbell-Ewald expressly declined to extend its holding to cases involving a direct
tender or a deposit of funds with the court. Campbell-Ewald, 136 S. Ct. at 672. CampbellEwald was also based in large part on the text of Rule 68, in which an “unaccepted offer is
considered withdrawn.” Id. at 670 (citing Fed. R. Civ. P. 68(a)-(b)). So Campbell-Ewald did
not extend the Rule 68 analysis to Rule 67.
24
resulting in mooted claims, “only when it is impossible for a court to grant any
effectual relief whatever to the prevailing party,” Campbell-Ewald, 136 S. Ct. at 669
(citation and quotations omitted), so the Court will address each one of these
arguments. (Fulton Dental also argues that Bisco’s offer does not include class
certification, incentive awards, or the ability to shift fees, Pl.’s Resp. at 10-14, but
the Court discusses these factors in the next section about Fulton Dental’s personal
stake in the class claims. See infra Section III.C).
On monetary damages, the Court previously explained that Bisco’s proposed
$3,600 deposit provides more than Fulton Dental’s maximum statutory recovery for
its individual TCPA claims ($3,000). See supra Section III.A. Fulton Dental does not
deny this; instead, it argues that Bisco’s tender is insufficient because it has
requested declaratory relief that Bisco’s fax violated the TCPA, Compl. at 8, ¶ 1,
and because “Bisco has not elected to admit liability; an essential element to
common-law tender offers,” Pl.’s Resp. at 6 (quoting Campbell-Ewald, 132 S. Ct. at
675 (“A tender of the amount due was deemed an admission of a liability on the
cause of action to which the tender related, so any would-be defendant who tried to
deny liability could not effectuate a tender.” (Thomas, J., dissenting) (citation and
quotations omitted)). But the Seventh Circuit has held that when a plaintiff has
received full monetary (or injunctive) relief, the desire to obtain additional
declaratory relief, without more, does not provide a strong enough personal stake in
the Article III sense to allow the plaintiff to keep litigating. In Chathas, for
example, the plaintiffs sued a union under the Taft-Hartley Act, moving for a
25
preliminary injunction to stop the union from soliciting certain contributions.
Chathas v. Local 134 Int’l Bhd. of Elec. Workers, 233 F.3d 508 (7th Cir. 2000).
Shortly after, the defendants made a Rule 68 offer that the preliminary injunction
against it be made permanent, expressly noting that the offer was not an admission
of liability. Id. at 511. The plaintiffs rejected the offer, but the court held that the
plaintiff’s claims were moot. Id. Although Campbell-Ewald abrogated this specific
part of the holding—namely, that an unaccepted Rule 68 offer could moot a claim—
the Seventh Circuit’s analysis of what constitutes complete relief in the Article III
sense is still relevant and binding on this Court (of course, the Seventh Circuit is
free to overturn its own precedent). When the plaintiffs appealed the district court’s
dismissal, arguing that they were entitled to declaratory relief or to a finding of
liability, the Seventh Circuit explained that there was no basis for the appeal: “A
winning party cannot appeal merely because the court that gave him his victory did
not say things that he would have liked to hear, such as that his opponent is a
lawbreaker. Adverse dicta are not appealable rulings.” Id. at 512 (citations omitted).
In other words, the failure to receive declaratory relief “can cause harm, but not the
sort of harm that the courts, in an effort to limit litigation, deem to create a genuine
controversy within the meaning of Article III of the Constitution.” Id. The Seventh
Circuit analogized to a plaintiff who receives a default judgment; that plaintiff could
not “force his opponent to confess to having violated the law, as it is always open to
a defendant to default and suffer judgment to be entered against him without his
admitting anything—if he wants, without even appearing in the case.” Id. (citation
26
omitted). Because the union offered a permanent injunction, it “thus thr[ew] in the
towel [so] there is nothing left for the district court to do except enter judgment.” Id.
Thus, “[t]he absence of a controversy in the constitutional sense precludes the court
from issuing an opinion on whether the defendant actually violated the law. Such
an opinion would be merely an advisory opinion, having no tangible, demonstrable
consequence, and is prohibited.” Id. (citing Alliance To End Repression v. City of
Chicago, 820 F.2d 873, 875-76 (7th Cir. 1987)). Similarly, in Holstein, the plaintiff’s
complaint sought declaratory relief that Chicago’s towing procedures were
unconstitutional. Holstein, 29 F.3d at 1147. When the city offered him full monetary
damages by refunding his towing fees, the plaintiff had no remaining stake in the
litigation; despite the lack of declaratory relief, “[he] may not spurn this offer of all
the damages he is owed and proceed to trial.” Id. (citation omitted). See also
Campbell-Ewald, 136 S. Ct. at 682, n.3 (Roberts, C.J., dissenting) (“Our precedents
… plainly establish that an admission of liability is not required for a case to be
moot under Article III.”); Leyse, 2016 WL 1253607, at *2 (“A plaintiff has no
entitlement to an admission of liability, as a party can always incur a default
judgment and liability without any factual findings.”). Thus, Fulton Dental need not
receive an admission of liability or declaratory relief because its receipt of full
monetary and injunctive relief deprives it of a personal stake to continue litigation
and eliminates a controversy before this Court.
Next, Fulton Dental argues that Bisco’s tender does not provide complete
relief because “[its] offer to enter into an injunction came as part of Bisco’s Rule 68
27
‘offer of judgment,’ which was issued on January 18, 2016, and expired on February
1, 2016.” Pl.’s Resp. at 14. As the Court previously explained, there is a difference
between a defendant’s Rule 68 offer of judgment and a tender coupled with
unconditional, immediate action. See supra Section III.B.1. Here, Bisco is asking the
Court to enter an immediate injunction against it. Def.’s Br. at 6. This is different
from a Rule 68 offer because Bisco is essentially saying that it has already stopped
the offending behavior. It would be splitting hairs to argue that Bisco is offering to
stop violating the TCPA as soon as the deposit is allowed, but not before then. So
this situation can be analogized to voluntary-cessation cases, where a plaintiff’s
injunctive-relief claim is mooted by the defendant’s change of behavior. It is true
that “a defendant seeking dismissal based on its voluntary change of practice or
policy must clear a high bar.” Ciarpaglini v. Norwood, 817 F.3d 541, 545 (7th Cir.
2016). Otherwise, it would be easy for defendants to temporarily stop the offending
practice, win a dismissal on mootness, and then just start back up again. Id. So a
party asserting mootness by voluntary cessation must “ma[ke] it absolutely clear
that the allegedly wrongful behavior could not reasonably be expected to recur.” Id.
(citations omitted). Here, no one reasonably expects that Bisco will send more
unsolicited faxes to Fulton Dental. Bisco has backed up its tender with
unconditional and immediate action and asks the Court to deposit $3,600 and enter
judgment against it. And unlike voluntary-cessation cases, where there is a concern
that defendants will resume their behavior, here, there will actually be a court
order requiring Bisco to stop sending improper faxes to Fulton Dental. There is no
28
reason to think that Bisco would ignore an enforceable injunction order, especially
when Bisco is the one asking for it. Nor would compliance with the injunction be
difficult or impractical, as Bisco has allegedly sent only one junk fax to Fulton
Dental in the past. Compl. ¶¶ 13-25.
In sum, Fulton Dental will have no remaining personal stake in the litigation
after receiving maximum statutory damages, injunctive relief, costs, and judgment
in its favor. After the funds are deposited, the Court will enter judgment for Fulton
Dental in the amount of $3,005 plus costs, with an order for Bisco to cease sending
Fulton Dental faxes that violate the TCPA. Fulton Dental is directed to file a bill of
costs pursuant to Rule 54.
C. Are Fulton Dental’s Class Claims Moot?
The remaining question is whether the class action remains live now that
Fulton Dental’s individual claims are moot. It does not automatically follow that
class action claims are moot when the named plaintiff’s individual claims are moot.
In some situations, a plaintiff whose individual claims are moot might still have a
sufficient personal stake in the class claims to move forward with them. Or the class
claims might continue because there remains a live dispute between the proposed
class and the defendants; so even if the named plaintiff no longer retains a personal
stake in the class claims, a different plaintiff can intervene to represent the class.
The case law reveals two situations where the mooting of the named plaintiff’s
individual claims does not moot the class claims: (1) when a class has been certified
(or when the plaintiff has filed a motion for class certification); and (2) when the
29
claims are inherently transitory or capable of repetition. In the first category of
exceptions, mootness of the class claims turns on when the individual claims were
mooted—in particular, whether a class has been certified or, at the least, a motion
for class certification has been filed.6 The procedural stage of the litigation affects
whether the plaintiff has developed a personal stake in the class claims, and
whether the proposed class has developed a live claim against the defendant. The
second class of exceptions is more concerned with the substance of the claims, and
protects claims that are so vulnerable to mootness that they might never be
litigated to completion without the benefit of an exception. The Court will discuss
each type of exception next. Ultimately, however, none of these exceptions apply to
Fulton Dental.
1. Class Certification Exception to Mootness
The Supreme Court has long held that when a named plaintiff’s claim
becomes moot before class certification, the class action is not necessarily moot. In
Sosna v. Iowa, the plaintiff argued that an Iowa law, which required one year of
state residency before seeking a divorce, was unconstitutional. Sosna v. Iowa, 419
U.S. 393, 395 (1975). After the class was certified, she had satisfied the one-year
It is worth noting that a named plaintiff’s personal “stake” in the Article III sense is
distinct from whether she qualifies as an adequate representative for the class under Rule
23. In other words, a named plaintiff whose individual claims are moot might continue to
satisfy Article III requirements so that she can continue litigating her class claims, but she
might not be able to “fairly and adequately protect the interests of the class” under Fed. R.
Civ. P. 23(a)(4). C.f. Sosna, 419 U.S. at 403 (that plaintiff faced “real and immediate” harm
for Article III purposes “does not automatically establish that [she] is entitled to litigate the
interests of the class she seeks to represent” under Rule 23); Susman v. Lincoln Am. Corp.,
587 F.2d 866, 870 (7th Cir. 1978) (although plaintiffs’ class claims could proceed despite
mooting of their individual claims, the court “express[ed] no opinion[] as to the named
plaintiffs’ ability to fairly and adequately represent the class”).
6
30
residency requirement, so her individual claim was moot. Id. at 398. In deciding
that the class claims could proceed, the Supreme Court established the principle
that “[w]hen the District Court certified the propriety of the class action, the class of
unnamed persons described in the certification acquired a legal status separate
from the interest asserted by [the plaintiff].” Id. at 399. Certification “has important
consequences for the unnamed members of the class,” such as the ability to bind
class members to a judgment on the merits. Id. at 399 n.8. As such, there was “[a
live] controversy … between a named defendant and a member of the class
represented by the named plaintiff, even though the claim of the named plaintiff
has become moot.” Id. at 402. The plaintiff also had a sufficient personal stake in
the class litigation because she faced a “real and immediate” threat of harm at the
time the class was certified. Id. at 403.
A few years later, in Parole Commission v. Geraghty, the plaintiff brought a
proposed class action challenging the Parole Commission’s release guidelines, but
he was released from prison while his appeal from the denial of class certification
was pending. U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 390 (1980). The
Supreme Court explained that there was still a live case despite the plaintiff’s
release and despite the denial of class certification in the district court, because the
potential class members still wanted to challenge the parole guidelines, as
“demonstrated by the fact that prisoners currently affected by the guidelines have
moved to be substituted, or to intervene, as ‘named’ respondents in this Court.” Id.
at 396. So Sosna and Geraghty together suggest that at the moment of a class
31
certification decision—whether a grant or denial—the class members have a live
interest against defendant. Id. As for the personal stake requirement—that is, the
named plaintiff’s ability to pursue the class claims despite being released from
prison—the Supreme Court explained that “the purpose of the ‘personal stake’
requirement is to assure that” there are “self-interested parties vigorously
advocating opposing positions” in front of the court. Id. at 403 (citations omitted).
And the named plaintiff could still pursue the appeal on behalf of the class because
he “continues vigorously to advocate his right to have a class certified,” and that
was “sufficient to assure that Art. III values are not undermined.” Id. at 404.
There is another Supreme Court case that allowed a mooted named plaintiff
to continue litigating the class’s claims after the denial of a motion to certify the
class. Deposit Guar. Nat. Bank, Jackson, Miss. v. Roper, 445 U.S. 326 (1980). Roper
involved a class action against a bank for imposing certain service charges. After
the district court denied class certification, the bank tendered full recovery to each
named plaintiff; over the plaintiffs’ objections, the district court allowed the bank to
deposit funds with the court and entered judgment for the plaintiffs. Id. at 329-30.
Although the plaintiffs’ individual claims were moot, the Supreme Court held that
the plaintiffs could continue representing the class in the appeal of the classcertification denial because they had a personal stake in the appeal—namely, “a
continuing individual interest in the resolution of the class certification question in
their desire to shift part of the costs of litigation to those who will share in its
benefits if the class is certified and ultimately prevails.” Id. at 336.
32
So in Sosna, Geraghty, and Roper, the Supreme Court thrice held that after
there has been a decision on class certification—whether a grant or denial of it—the
mooting of the class representative’s claims will not necessarily moot the class
claims. The dispute over class certification was enough to create (1) a live dispute
between the class members and the defendants; and (2) a personal stake in the
litigation by the named plaintiff such that she could continue pursuing the class
claims. So the decision on class certification represented a key temporal line that
changed the parties’ legal status and interests. The Supreme Court has not,
however, addressed the “[d]ifficult questions [that] arise as to what, if any, are the
named plaintiffs’ responsibilities to the putative class prior to certification.” Roper,
445 U.S. at 340 n.12. Indeed, many circuits have since grappled with the proper
approach when a named plaintiff’s claim is live at the filing of the complaint but
becomes moot before class certification is decided. Federal courts have generally
followed three approaches in this scenario, holding that the class claims are (1)
moot;7 (2) not moot if there has been a motion for class certification;8 or (3) not moot
even if there has been no motion for class certification, so long as the named
plaintiff has not unduly delayed filing one (in this last category, courts are more
7See,
e.g., Cruz v. Farquharson, 252 F.3d 530, 533 (1st Cir. 2001) (“[A] putative class
action … ordinarily must be dismissed as moot if no decision on class certification has
occurred by the time that the individual claims of all named plaintiffs have been fully
resolved.” (citations omitted)); Comer v. Cisneros, 37 F.3d 775, 798 (2d Cir. 1994) (“[I]n
general, if the claims of the named plaintiffs become moot prior to class certification, the
entire action becomes moot. … In contrast, class certification will preserve an otherwise
moot claim.” (citation omitted)).
8See, e.g., Fontenot v. McCraw, 777 F.3d 741, 750 (5th Cir. 2015) (as long as there
has been a motion for class certification, “a court order granting or denying class
certification, and therefore resolving the separate status of the class, is unnecessary to
maintaining a live class action suit despite the mootness of the named plaintiff’s case”
(citation omitted)).
33
resistant to mooting the class claims when there is evidence of “picking off” named
plaintiffs).9
The Seventh Circuit appears to follow the second approach, that is, the filing
of the class certification motion is enough to keep the class claims alive. In other
words, “the mooting of the named plaintiff’s claim in a class action by the
defendant’s satisfying the claim does not moot the action so long as the case has
been certified as a class action … or … so long as a motion for class certification has
been made and not ruled on.” Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 54647 (7th Cir. 2003) (citations omitted). The Seventh Circuit focused on this
procedural stage—the filing of the motion for class certification—in Susman v.
Lincoln Am. Corp., 587 F.2d 866, 870 (7th Cir. 1978), which was decided three years
after Sosna. There, after the Seventh Circuit affirmed the denial of class
certification, Susman v. Lincoln Am. Corp., 561 F.2d 86 (7th Cir. 1977), the
defendants tendered full relief to the named plaintiffs, Susman, 587 F.2d at 868.
Normally, the mooting of the named plaintiff’s individual claims at this stage would
also moot the class claims, because the appeal was over. Susman, 587 F.2d at 869;
9See,
e.g., Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091-92 (9th Cir. 2011) (the
mooting of plaintiff’s individual claim “before [he] 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”); Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d
1239, 1250 (10th Cir. 2011) (“a named plaintiff in a proposed class action for monetary
relief may proceed to seek timely class certification” even when his claims were mooted
before filing for class certification); Weiss v. Regal Collections, 385 F.3d 337, 348 (3d Cir.
2004), abrogated on other grounds by Campbell-Ewald, 136 S. Ct. 663 (“[a]bsent undue
delay in filing a motion for class certification,” class action complaint need not be dismissed
when individual claims are mooted before the filing of class certification); id. at 345
(allowing defendants to “pick off” plaintiffs would frustrate the purposes of class actions
and “Congress’s explicit directive that the FDCPA be enforced by private attorney generals
acting in a representative capacity”).
34
see also Geraghty, 445 U.S. at 404 (although the named plaintiff had a personal
stake in appealing the denial of class certification, “[i]f, on appeal, it is determined
that class certification properly was denied, the claim on the merits must be
dismissed as moot”). But after the Seventh Circuit affirmed the denial of class
certification, and before the defendants tendered relief, the named plaintiffs hired
new attorneys and made renewed motions for class certification. Susman, 587 F.2d
at 868. The court explained “that when a motion for class certification has been
pursued with reasonable diligence and is then pending before the district court, a
case does not become moot merely because of the tender to the named plaintiffs of
their individual money damages.” Id. at 870. Thus, “the motion for certification,
while pending … sufficiently, though provisionally, bring[s] the interests of class
members before the court so that the apparent conflict between their interests and
those of the defendant will avoid a mootness artificially created by the defendant by
making the named plaintiff whole.” Id. at 869. In so holding, the Seventh Circuit
relied on other cases that “have consistently recognized that unnamed class
members have an interest in a lawsuit even before a Rule 23 determination is made
that a class action may be maintained on their behalf.” Id. For example, potential
class members can weigh in on class certification or challenge the named plaintiff’s
adequacy of representation, id. (citation omitted), and the Supreme Court’s
American Pipe doctrine tolls the statute of limitations for a putative class member’s
claims when the class action complaint is filed, id. (citing American Pipe &
Construction Co. v. Utah, 414 U.S. 538 (1974)). Potential class members “may also
35
have a right to be informed of, or even included in, a settlement that occurs prior to
class certification.” Id. (citation omitted). These examples showed that “at least in a
limited sense, the interests of the unnamed class members are before the court
during the pendency of a motion for class certification.” Id. (emphasis added).
Susman focuses on the existence of a live claim between the proposed class
and the defendants when a class-certification motion has been filed; other cases also
suggest that the named plaintiff retains a personal stake in the class claims only
after there has been a motion for class certification. For example, in Damasco, the
Seventh Circuit considered the consequences of a defendant’s attempt to pick off
named plaintiffs and extinguish a class action. Damasco v. Clearwire Corp., 662
F.3d 891 (7th Cir. 2011). There, the TCPA defendants made a Rule 68 offer of
complete relief to the plaintiff, who refused the offer and then moved for class
certification; the court held that this offer mooted the plaintiff’s individual claims.
Id. at 893. In a later case called Chapman, the Seventh Circuit anticipated
Campbell-Ewald and overruled this part of Damasco’s holding, namely, that a Rule
68 settlement offer mooted a plaintiff’s claims. Chapman v. First Index, Inc., 796
F.3d 783 (7th Cir. 2015). But Chapman did not overrule Damasco and other Rule 68
cases as to what happens to class action claims when the named plaintiff’s
individual claims become moot. Id. As to this issue, Damasco decided that “[t]o
allow a case, not certified as a class action and with no motion for class certification
even pending, to continue in federal court when the sole plaintiff no longer
maintains a personal stake defies the limits on federal jurisdiction expressed in
36
Article III.” Damasco, 662 F.3d at 896 (emphasis added) (citations omitted). So
whatever the reason for individual mootness—whether a tender of complete relief,
the defendant’s voluntary cessation, the passage of time, or the changing of a
statutory regime—Damasco suggested that the plaintiff no longer has a stake in the
class claims, so those claims are moot, when there has been no motion for class
certification. Id.
The Seventh Circuit also came to this conclusion in Damasco despite
consistent disapproval of defendants’ attempts to avoid class litigation by mooting
the plaintiff’s individual claims. See Espenscheid, 688 F.3d 872, 874 (7th Cir. 2012)
(acknowledging that there are “case[s] in which a defendant manufactures mootness
in order to prevent a class action from going forward, as by making an offer of
judgment that exceeds any plausible estimate of the harm to the named plaintiffs
and so extinguishes their stake in the litigation”); Primax Recoveries, 324 F.3d at
547 (mooting class claims when plaintiff has filed motion for class action would
allow the “defendant [to] delay the action indefinitely by paying off each class
representative in succession”); Susman, 587 F.2d at 870 (“If the class action device
is to work, the courts must have a reasonable opportunity to consider and decide a
motion for certification. 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.”). Damasco also acknowledged that
picking off of plaintiffs could still occur before the motion for class certification has
37
been filed, but it ultimately did not want to “forge a new rule that runs afoul of
Article III.” Damasco, 662 F.3d at 895. Instead, the court offered “[a] simple solution
to the buy-off problem … : Class-action plaintiffs can move to certify the class at the
same time that they file their complaint. The pendency of that motion protects a
putative class from attempts to buy off the named plaintiffs.” Id. In so deciding, the
Seventh Circuit disagreed with other circuits that “have fashioned a new rule, that,
absent undue delay, a plaintiff may move to certify a class and avoid mootness even
after [his individual claims are moot].” Id. at 895-96 (citing, e.g., Pitts v. Terrible
Herbst, Inc., 653 F.3d 1081, 1091-92 (9th Cir. 2011); Lucero v. Bureau of Collection
Recovery, Inc., 639 F.3d 1239, 1249-50 (10th Cir. 2011); Sandoz v. Cingular Wireless
LLC, 553 F.3d 913, 920-21 (5th Cir. 2008); Weiss v. Regal Collections, 385 F.3d 337,
348 (3d Cir. 2004)).10 Since Damasco, many class action plaintiffs have heeded the
Seventh Circuit’s advice and filed “prophylactic” motions for class certification early
in the litigation. E.g., Smith v. Specified Credit Ass’n, Inc., 2015 WL 468871, at *3
(N.D. Ill. Jan. 30, 2015), reconsideration denied, 2015 WL 1590415 (N.D. Ill. Apr. 8,
2015) (“Before any motion to certify a class has been filed, the plaintiff whose
individual demand has been satisfied has no continuing stake in the case; were it
10Some
circuits alternatively recognize a picking-off exception to mootness, which
turns on the defendant’s litigation conduct. See Chen v. Allstate Ins. Co., 819 F.3d 1136,
1148 (9th Cir. 2016) (defendant’s deposit of full relief before motion for class certification
was filed did not moot class claims, because “Article III mootness should not provide a
vehicle for ‘picking off’ named plaintiffs or eliminating class treatment of claims until there
has been a reasonable opportunity to present the issue of class certification to the court”
(citation and quotations omitted)); Wilson v. Gordon, 822 F.3d 934, 947 (6th Cir. May 23,
2016) (when a “defendant is on notice that the named plaintiff wishes to proceed as a class,”
she should not be able to “strategically seek to avoid that possibility”).
38
otherwise, the prophylactic motion suggested in Damasco would have been
unnecessary.”).
Because the Seventh Circuit has drawn the line at the filing of classcertification motions, and because it has explicitly declined to make any mootness
exception for a defendant’s picking-off conduct, Fulton Dental’s class claims are
moot because it failed to file a motion for class certification before its individual
claims became moot—indeed, Fulton Dental has never filed such a motion in this
case. When there is no pending motion for class certification, there is no live claim
between the proposed class members and the defendant, nor does the named
plaintiff have a personal stake to vigorously advocate for the class claims. So there
appears to be no basis for allowing Fulton Dental’s class claims to continue.
The Court notes that there is room to debate whether it makes sense to draw
the mootness line at the filing of a motion for class certification. The filing of the
motion seems to prioritize form over substance, because the solution to picking off—
filing a protective motion for class certification along with the complaint—does not
serve any real litigation purpose. Plaintiffs generally do not file, and courts cannot
decide, class certification motions at the time of the complaint’s filing because there
has been no discovery on the Rule 23 requirements. Similarly, in other contexts,
courts typically do not require parties to move for relief before the issues are ready
to decide. (In fact, such motions might even warrant Rule 11 sanctions.) Nor does
Rule 23 require an immediate filing of a motion for class certification. So when a
plaintiff files a protective motion for class certification early in the litigation, the
39
only purpose of which is to thwart potential picking off, the court will generally
have to continue the motion pending discovery. It is strange that mootness hinges
on whether the plaintiff has filed a boilerplate motion that serves no actual
litigation purpose. As another district court put it, “[i]t would make little sense to
fashion a rule that would allow the fate of a case to be resolved by a race to the
courthouse. … Such an arbitrary result would serve no purpose other than
providing defendants a procedural advantage or requiring plaintiffs in every class
action to accompany their complaint with a motion for class certification.” Wilder
Chiropractic, Inc. v. Pizza Hut of S. Wis., Inc., 754 F. Supp. 2d 1009, 1015 (W.D.
Wis. 2010).
What’s more, there is no real difference in the named plaintiff’s personal
stake in the litigation, or the existence of a live claim between proposed class
members and defendants, on the day before the class-certification motion is filed
compared to the day after. In both instances, no decision on class certification has
been made, nor is the motion even ready to be presented. In fact, it makes more
sense that an interest in class litigation already exists at the filing of the class
action complaint. Susman cited several examples where class members have an
interest in class litigation even before the class-certification motion is filed, such as
the tolling of their individual claims (which begins at the time the class action
complaint is filed) or the right to be a part of a class-wide settlement. 587 F.2d at
869 (citations omitted); see also Lucero v. Bureau of Collection Recovery, Inc., 639
F.3d 1239, 1250 (10th Cir. 2011) (concluding that “[a] nascent interest attaches to
40
the proposed class upon the filing of a class complaint,” and that there is “no
authority on which to distinguish the case in which a class certification motion is
pending or filed … any Article III interest a class may or may not have in a case is
or is not present from its inception”). This approach would not conflict with Sosna,
Geraghty, Roper, and their progeny; yes, those cases focused on the point in time
when class certification had been decided, but they did not hold that the class
certification decision was the earliest stage at which the proposed class or named
plaintiffs had an interest in the class claims. The Supreme Court has also
consistently described Article III “[j]usticiability [as] … not a legal concept with a
fixed content or susceptible of scientific verification” but rather “one of uncertain
and shifting contours.” Flast v. Cohen, 392 U.S. 83, 95, 97 (1968) (citation and
quotations omitted). Mootness has a “flexible character,” and deciding whether
there is “a sharply presented issue in a concrete and vigorously argued case … must
be decided on [the] [] facts” of each case.” Geraghty, 445 U.S. at 400, 405 n.11
(citations and quotations omitted); Sosna, 419 U.S. at 402 n.11 (in “cases in which
the controversy involving the named plaintiffs is such that it becomes moot as to
them before the district court can reasonably be expected to rule on a certification
motion … whether the certification can be said to ‘relate back’ to the filing of the
complaint may depend upon the circumstances of the particular case”). So it makes
sense that the specific procedural stage of the certification process should not
necessarily be dispositive of the mootness question.
41
In any event, circuit precedent is clear that the filing of the motion for class
certification is the key procedural step on which mootness of the class claims turns:
when a plaintiff’s individual claims are moot before the motion’s filing, the proposed
class members do not have a live claim against the defendants, nor does the named
plaintiff have a personal stake in maintaining the class claims. Damasco also gave
plaintiffs a clear, easy solution to ward against picking off: file a protective motion
for class certification early. Because the Court must follow this precedent, the class
claims are dismissed because Fulton Dental has not filed a motion for class
certification.
Finally, Fulton Dental argues that it should continue to represent the class,
whose claims should proceed, because it has an interest in fee-shifting and incentive
awards. Pl.’s Resp. at 12-14. It is true that both of those interests could be enough to
establish a named plaintiff’s personal stake in the class claims even when its
individual class claims are moot. But the same problem remains: those interests do
not exist before there has been a motion for class certification. In Roper, the
Supreme Court allowed the plaintiffs to pursue an appeal of the denial of class
certification, even after receiving complete relief and having judgment entered in
their favor. 445 U.S. at 336-37. The named plaintiffs’ continued personal stake in
the class controversy was “their desire to shift part of the costs of litigation to those
who will share in its benefits if the class is certified and ultimately prevails.” Id. at
349. But Roper did not purport to extend this interest to all points of the litigation,
explaining that it was not reaching the “[d]ifficult questions … as to what, if any,
42
are the named plaintiffs’ responsibilities to the putative class prior to
certification[.]” Id. at 340 n.12. Similarly, the Seventh Circuit has suggested that an
incentive award can establish a named plaintiff’s continued personal stake in the
litigation, but—again—not before a motion for class certification has been filed.
Espenscheid, 688 F.3d at 874. For example, in Espenscheid, after the district court
denied certification of a FLSA collective action, the defendants settled with the
named plaintiffs. Id. When those plaintiffs appealed the denial, the defendants
argued that the appeal had to be dismissed because the plaintiffs no longer had a
live interest in the case. Id. Explaining that the justiciability analysis was the same
for FLSA collective actions and Rule 23 class actions, id. at 877, the Seventh Circuit
concluded that “the prospect of such a[n] [incentive award] payment, though
probabilistic rather than certain, suffices to confer standing” to pursue the appeal.
Id. at 875. Focusing on the importance of timing with regards to this interest, the
court noted that “[w]ithout certification there is no class for a plaintiff to represent,
and so he cannot hope to obtain an incentive award; he has accomplished nothing
for the class and his own claim has been satisfied as the result of a voluntary
negotiation.” Id. On the other hand, “if he is permitted to appeal the denial of class
certification and prevails and on remand remains the class representative despite
having settled his individual claim, he can look forward to eventually receiving an
incentive award.” Id. So again, Fulton Dental does not yet have a financial interest
in receiving an incentive award sufficient to stave off class mootness, because there
has been no motion for, much less a decision on, class certification.
43
2. Substantive Exceptions to Mootness
For the sake of completeness, the Court will also address other exceptions
that allow class claims to proceed when a plaintiff’s individual claims become moot,
even though the parties did not raise these arguments. These exceptions focus on
the substance of the plaintiff’s claims, and include claims that are either inherently
transitory or capable of repetition. Neither exception applies to Fulton Dental.
i. Inherently Transitory
The idea behind the inherently transitory exception is explained in Sosna.
After deciding that the class claims were still justiciable after the plaintiff’s
individual claim became moot after certification, Sosna, 419 U.S. at 403, the
Supreme Court recognized that “[t]here may be cases in which the controversy
involving the named plaintiffs is such that it becomes moot as to them before the
district court can reasonably be expected to rule on a certification motion,” id. at
402 n.11. In these cases, the certification decision could relate back to the filing of
the complaint; in other words, the court would proceed as if class certification had
been decided at the time of the complaint’s filing, so the named plaintiff’s individual
claim would not be considered moot until after class certification had been decided.
Id. Since Sosna, the Supreme Court has “held that the relation-back doctrine may
apply in Rule 23 cases where it is certain that other persons similarly situated will
continue to be subject to the challenged conduct and the claims raised are so
inherently transitory that the trial court will not have even enough time to rule on a
motion for class certification before the proposed representative’s individual interest
44
expires.” Genesis Healthcare, 133 S. Ct. at 1530-31 (quoting County of Riverside v.
McLaughlin, 500 U.S. 44, 52 (1991)) (quotations omitted).
In Gerstein, for example, the plaintiffs filed a proposed class action
challenging the constitutionality of Florida’s pretrial detention procedures. Gerstein
v. Pugh, 420 U.S. 103, 105 (1975). Before addressing the merits of the claims, the
Supreme Court noted that the district court record did not show whether any of the
named plaintiffs were still in custody when the class had been certified. Id. at 110
n.11. Although “[s]uch a showing ordinarily would be required to avoid mootness
under Sosna[,] … this case is a suitable exception to that requirement.” Id.
(citations omitted). Because the length of pretrial custody was unpredictable due to
“release …[,] dismissal of the charges, or a guilty plea, as well as by acquittal or
conviction after trial[,] [i]t is by no means certain that any given individual, named
as plaintiff, would be in pretrial custody long enough for a district judge to certify
the class.” Id. The Seventh Circuit applied these principles in a similar case. In
Olson, the named plaintiff also asserted constitutional violations during his time in
a temporary detention center while awaiting trial. Olson v. Brown, 594 F.3d 577,
579 (7th Cir. 2010). Olson moved for certification at the same time he filed his
complaint, but was transferred to a different facility shortly after. Id. The court
applied the inherently transitory exception, which prevents class mootness when
“(1) it is uncertain that a claim will remain live for any individual who could be
named as a plaintiff long enough for a court to certify the class; and (2) there will be
a constant class of persons suffering the deprivation complained of in the
45
complaint.” Id. at 582 (citing, e.g., Gerstein, 420 U.S. at 110 n.11). As to the first
requirement, “the length of incarceration in a county jail generally cannot be
determined at the outset and is subject to a number of unpredictable factors,
thereby making it inherently transitory.” Id. And the second factor was also met
because the fifty-three affidavits filed in the case showed the “pervasive nature of
these claims.” Id. at 584.
The inherently transitory exception does not apply here because “[t]his
controversy is not one of those … situations, such as a pregnancy or an election
campaign, that will run its course faster than courts can usually act to provide
complete review on the merits.” Ciarpaglini, 817 F.3d at 547 (citations omitted).
The purpose of the exception is to allow an opportunity to decide claims that are
fleetingly live. But that is not the situation here—Fulton Dental does not meet
either of the two Olson requirements; for one, there is nothing inherent to TCPA
claims that make them unlikely to survive the duration of ordinary litigation.
Unlike pretrial detention, which can end at any point, a past statutory violation of
the TCPA cannot be mooted by the mere passage of the time. Nor is there any
suggestion of an ongoing class of people suffering from a stream of unwanted Bisco
faxes. So Fulton Dental cannot benefit from this exception.
ii. Capable of Repetition
Another mootness exception applies to claims that are capable of repetition,
but evading review. When “the named plaintiff does have a personal stake at the
outset of the lawsuit, and where the claim may arise again with respect to that
46
plaintiff[,] the litigation then may continue notwithstanding the named plaintiff’s
current lack of a personal stake.” Geraghty, 445 U.S. at 398 (citations omitted).
Because “the litigant faces some likelihood of becoming involved in the same
controversy in the future, vigorous advocacy can be expected to continue.” Id. For
this exception to apply, a plaintiff “must have a reasonable expectation of being
subjected to the offending behavior in the future.” Olson, 594 F.3d at 583. While the
inherently transitory exception involves a constant class of plaintiffs other than the
named plaintiff who suffers from the offending conduct, this exception involves a
“claim [that] is capable of repetition as to the named plaintiff.” Id. (emphasis
added). But the named plaintiff must face more than a possibility of similar conduct
in the future; “[t]he Court has never held that a mere physical or theoretical
possibility was sufficient to satisfy the test for capable of repetition, yet evading
review.” Jones v. Sullivan, 938 F.2d 801, 806-07 (7th Cir. 1991) (citation and
quotations omitted) (after agency fixed problem of attributing someone else’s income
to the plaintiff’s social security number, “plaintiffs, having received the SSN relief
they requested, are not likely to become involved in the same controversy in the
future”). So the capable-of-repetition exception does not apply here, because it is
only speculative that Fulton Dental, who has received one junk fax, will continue to
receive them from Bisco in the future.11
11Although
the Seventh Circuit has not clarified whether the inherently transitory
and capable of repetition exceptions apply only when there has a decision on class
certification, the procedural posture would seem to matter less to these exceptions because
it is the substantive nature of the claims that matter. These exceptions deal with the
“problem … when the claim at issue is so inherently transitory that individual plaintiffs
47
IV. Conclusion
For the reasons explained above, Bisco’s Motion to Deposit Funds with the
Court, R. 21, is granted, and the $3,600 must be deposited with the Clerk’s Office,
along with a notice of deposit (to be filed on the electronic docket). Bisco shall
deposit the funds by September 7, 2016. After the funds are deposited, the Court
will order the funds to be released to Fulton Dental in accordance with Rule 67(b)
(explaining that deposits and withdrawals must accord with 28 U.S.C. § 2042,
which in turn provides that “[a]ny claimant entitled to any such money may, on
petition to the court and upon notice to the United States attorney and full proof of
the right thereto, obtain an order directing payment to him”). As a result of the
deposit, Fulton Dental’s individual and class claims will be moot, and the entire
case will be dismissed under Rule 12(b)(1). After the deposit is made, judgment
shall also be entered for Fulton Dental in the amount of $3,005, along with an
injunction against Bisco to refrain from using any device to send an unsolicited
facsimile advertisement to Fulton Dental, in violation of the Telephone Consumer
cannot even expect to maintain it long enough to obtain a decision on, or even file a motion
for, class certification.” Newberg on Class Actions § 2:13 (5th ed.) (2016).
48
Protection Act, 47 U.S.C. § 227(b). Fulton Dental is directed to file a Rule 54(d) bill
of costs with the Court by September 14, 2016; the costs will be paid out of the
remainder of the deposit.12
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: September 2, 2016
12Because
the Court has concluded that both the individual and class claims are
moot, the Court need not consider Bisco’s additional arguments of estoppel and waiver. See
Def.’s Br. at 9-10.
49
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