Bailey v. Domino's Pizza, LLC
Filing
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ORDER & REASONS denying 66 Motion for Sanctions. Signed by Judge Eldon E. Fallon on 7/12/12. (ala, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JONATHAN BAILEY
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VERSUS
DOMINO’S PIZZA, LLC
CIVIL ACTION
NO. 11-04
SECTION "L"(3)
ORDER & REASONS
The Court has pending before it Defendant Domino’s Pizza LLC.’s Motion for Sanctions
Pursuant to Federal Rule of Civil Procedure 11 (Rec. Doc. 66). The Court has reviewed the
briefs and now issues this Order and Reasons.
I.
Background
This putative class action arose out of alleged unsolicited cellular phone text messages
sent by Defendant, Domino’s Pizza LLC, to Plaintiff Jonathan Bailey and other Louisiana
recipients. Plaintiff alleged that he had received three unsolicited text messages on his cellular
phone advertising discounts on Domino’s Pizza products. The last message had allegedly been
sent on April 3, 2009. He filed suit in this Court on December 22, 2010, asserting violations of
the Telephone Consumer Protection Act and associated regulations. The Complaint proposed a
class action on behalf of “[a]ll persons in the state of Louisiana who, within the last four years,
received a text message advertisement on their cellular telephone placed or transmitted by or on
behalf of Domino’s Pizza LLC without the subscriber’s express consent.” (Rec. Doc. 1 at ¶ 30).
On February 21, 2011, Defendant filed a motion to dismiss. (Rec. Doc. 15). On April
27, 2011, relying on Fifth Circuit precedent, the Court issued an Order and Reasons granting
Defendant’s motion to dismiss (Rec. Doc. 42), but on January 18, 2012, the Supreme Court
overruled the Fifth Circuit precedent relied on by the Court in granting that motion, Mims v.
Arrow Fin. Servs., LLC, 132 S. Ct. 740 (2012). Accordingly, on April 5, 2012, the Court issued
an order granting Plaintiff’s motion for reconsideration (Rec. Doc. 45) and vacating its prior
dismissal of most of Plaintiff’s claims. (Rec. Doc. 59).
Soon after the case was reopened, Defendant submitted a motion for summary judgment
on the grounds that Plaintiff Bailey had actually consented to receive the text messages described
in the Complaint. (Rec. Doc. 63). Defendant’s motion contained affidavits and database
printouts from Defendant’s third-party vendor indicating that Plaintiff had created an account on
Defendant’s website and provided his phone number to receive text message advertisements in
the process of doing so. Plaintiff moved to set a scheduling conference in order to set discovery
deadlines pursuant to LR 26.1. (Rec. Doc. 76). The Court denied Plaintiff’s motion, noting in
its order that at this point in the litigation, Plaintiff was entitled to limited discovery only, the
scope of which would be framed by Defendant’s motion. (Rec. Doc. 78).
On May 4, 2012, Plaintiff served Interrogatories, Requests for Production of Documents,
and Requests for Admission of Fact. On June 11, 2012, Defendant issued its Responses and
Objections to those requests. Defendant objected to many of Plaintiff’s requests as beyond the
scope of the summary judgment motion. On June 26, 2012, Plaintiff filed a motion to compel.
(Rec. Doc. 84). On July 3, 2012, Plaintiff filed a motion to stay proceedings on Defendant’s
motion for summary judgment pending further discovery (Rec. Doc. 99).1 Around this time,
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Plaintiff also filed a response to Defendant’s motion for summary judgment and attached
affidavits from him and his counsel stating that he had not consented to receive text messages.
(Rec. Doc. 97). Defendant then filed a motion to strike Plaintiff’s affidavits. (Rec. Doc. 105).
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Defendant also supplemented its discovery responses to Plaintiff. On July 9, 2012, the parties
informed the Court that they had agreed to a dismissal of Plaintiff’s claims, but that Defendant
reserved the right to pursue its motion for sanctions. (Rec. Doc. 120). The next day, the parties
filed a stipulation of dismissal to that effect. (Rec. Doc. 115).
II.
Present Motion
Although Plaintiff’s claims have been dismissed, Defendant’s motion for Rule 11
sanctions (Rec. Doc. 66) remains pending before the Court. Defendant argues that Plaintiff was
aware that he had opted in to receive text messages, but nonetheless falsely alleged that he had
not provided such consent when he brought the instant case. Defendant further argues that
Plaintiff’s counsel did not perform a reasonable inquiry as required by Rule 11 before filing the
Complaint. Defendant requests compensation for attorney’s fees spent litigating its motion to
dismiss and the instant motion.
Plaintiff responds that Rule 11 sanctions are reserved for relatively rare circumstances
and cites the five factors laid out in Thomas v. Capital Sec. Services, Inc., 836 F.2d 866, 875 (5th
Cir. 1988), for support. Furthermore, Plaintiff notes that he agreed to dismiss the case after
finally receiving certain information, originally requested long ago, on July 3, 2012; essentially,
Plaintiff argues that the protracted nature of the case is Defendant’s fault, since Defendant
delayed the provision of that information. Plaintiff also argues that Defendant failed to send the
required letter before filing this motion. Plaintiff counter-requests sanctions against Defendant
and asks for compensation for the cost of opposing Defendant’s Rule 11 motion. (Rec. Doc. 98
at 10-12).
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III.
Law & Analysis
Pursuant to Federal Rule of Civil Procedure 11(b), an attorney who presents a written
motion to the Court
certifies that to the best of the person's knowledge, information,
and belief, formed after an inquiry reasonable under the
circumstances:
(1) it is not being presented for any improper purpose, such
as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation;
(2) the claims, defenses, and other legal contentions are
warranted by existing law or by a nonfrivilous argument for
extending, modifying, or reversing existing law or for
establishing new law;
(3) the factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further
investigation or discovery; and
(4) the denials of factual contentions are warranted on the
evidence or, if specifically so identified, are reasonably
based on belief or a lack of information.
“[T]he central purpose of Rule 11 is to deter baseless filings in district court . . . .” Cooter &
Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). Under Rule 11(c)(1), “[i]f, after notice and a
reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the
court may impose an appropriate sanction on any attorney . . . that violated the rule or is
responsible for the violation.” Rule 11(c)(2) prescribes the procedure for filing a motion for
sanctions under Rule 11:
A motion for sanctions must be made separately from any other
motion and must describe the specific conduct that allegedly
violates Rule 11(b). The motion must be served under Rule 5, but
it must not be filed or presented to the court if the challenged
paper, claim, defense, contention, or denial is withdrawn or
appropriately corrected within 21 days after service or within
another time the court sets. If warranted, the court may award to
the prevailing party the reasonable expenses, including attorney's
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fees, incurred for the motion.
Defendant argues that Plaintiff has violated Rule 11. Specifically, Defendant claims that
Plaintiff and his counsel knew that Plaintiff had opted in to receive text messages from
Defendant before filing suit, but nonetheless made false allegations to the contrary in the
Complaint. Defendant argues that the fact of consent was within Plaintiff’s knowledge when he
filed the Complaint, that Plaintiff had made a statement on his website (“I don’t recall clearly
giving my approval.”) suggesting that he was aware of having given consent, and that Plaintiff
failed to withdraw the Complaint after Defendant brought to his attention persuasive evidence
demonstrating that Plaintiff had opted in. Defendant argues that Plaintiff’s counsel failed to
perform a reasonable inquiry, as required by Rule 11, by relying blindly on Plaintiff’s statements
and failing to investigate records (such as Plaintiff’s credit card statements) that were within
Plaintiff’s control.
Plaintiff responds that the factors set out in Thomas weigh in his favor. In particular,
Plaintiff argues that discovery was needed to evaluate the consent issue, since the relevant
information was in Defendant’s control, and points to the fact that he agreed to dismiss his
claims as soon as he received certain discovery from Defendant. See Thomas, 836 F.2d at 866.
Furthermore, Plaintiff argues that his web post was not necessarily inconsistent with the
allegations in the Complaint, since it suggests that at the time of the post, Plaintiff was simply
not sure whether he had consented. Plaintiff requests sanctions against Defendant for filing a
motion for sanctions before the completion of discovery.
The Court finds that no Rule 11 violation occurred and declines to impose sanctions on
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either party.2 It is apparent from the parties’ briefs and exhibits that Plaintiff consented to
receive text messages from Defendant while filling out an online order form on Defendant’s
website. The Court believes that Plaintiff either failed to realize he was opting in to receive text
messages while completing this form, or later forgot that he had opted in while doing so.
Furthermore, it was reasonable for counsel to rely on his client’s statements in this type of case,
where the most reliable evidence of Plaintiff’s consent was in Defendant’s possession, and
Plaintiff’s principal evidence at the beginning of the litigation was his personal recollection of
events. “[T]he feasibility of a prefiling investigation” was limited in this case. Thomas, 836
F.2d at 875. Thus, it was reasonable for counsel to rely on Plaintiff’s assertion that he had not
consented to receive text messages.3
Rule 11 is reserved for the rare circumstances in which the Court feels that counsel is
motivated by an “improper purpose.” In this case, Plaintiff’s counsel may have had an incorrect
impression of the underlying facts, and may not have pursued every possible avenue of
investigation before filing the complaint, but those facts alone do not constitute a Rule 11
violation. Similarly, while the Court finds that Defendant’s motion for sanctions is not
meritorious, the Court does not believe that the motion was filed for an improper purpose, and
thus declines to impose sanctions on Defendant. Neither the original Complaint nor the instant
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Because the Court finds that no Rule 11 violation occurred, it does not reach the issue of
whether Defendant was required to send a second letter to Plaintiff’s counsel before refiling its
previously submitted motion for sanctions.
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Defendant argues that Plaintiff’s counsel could have inspected Plaintiff’s credit card
statements or other records. The Court agrees that Plaintiff’s counsel may not have performed
the fullest investigation possible, but the Court also notes that Rule 11 does not require the
fullest possible inquiry—only a “reasonable inquiry” is required.
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motion constitute “baseless filings” as contemplated by Rule 11. Therefore, both requests for
sanctions must be denied.
IV.
Conclusion
For the foregoing reasons,
IT IS ORDERED that Defendant’s Motion for Sanctions and Plaintiff’s counterrequest
for sanctions are DENIED.
New Orleans, Louisiana, this 12th day of July, 2012.
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UNITED STATES DISTRICT JUDGE
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