Sebestyn v. Leikin, Ingber & Winters P.C.

Filing 28

OPINION AND ORDER denying 11 Motion to Certify Class; granting 14 Motion to Dismiss. Signed by District Judge Patrick J. Duggan. (MOre)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CAROLYN A. SEBESTYEN,
Plaintiff,
v.
Case No. 13-cv-15182
LEIKIN, INGBER & WINTERS, P.C., and
PAUL M. INGBER,

Hon. Patrick J. Duggan

Defendants.

OPINION AND ORDER GRANTING DEFENDANTS’ MOTION TO
DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND
DENYING PLAINTIFF’S MOTION FOR CLASS CERTIFICATION
WITHOUT PREJUDICE
Prompted by a debt collection notice she received, Plaintiff Carolyn A.
Sebestyen filed this lawsuit under the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692-1692p, against Defendants Leikin, Ingber &
Winters, P.C. (“LIW”) and Paul M. Ingber (“Ingber”) (collectively, “Defendants”)
on December 20, 2013. In addition to seeking class relief, Plaintiff’s Complaint
requests statutory damages, as well as attorney’s fees, costs, and expenses.
Less than two months after Plaintiff instituted the present action, Defendants
made Plaintiff an offer of judgment pursuant to Federal Rule of Civil Procedure
68. Plaintiff did not accept the offer and subsequently filed a class certification

motion pursuant to Rule 23. Approximately one month after Plaintiff filed her
Rule 23 motion, Defendants filed a motion to dismiss under Rule 12(b)(1) or, in
the alternative, a motion for summary judgment pursuant to Rule 56.1 These two
motions, which have been fully briefed and were the subject of a motion hearing
on December 8, 2014, are presently before the Court.
For the reasons that follow, the Court concludes that Defendants’ Rule 68
offer of judgment rendered this action moot. Accordingly, under O’Brien v. Ed
Donnelly Enterprises, Inc., 575 F.3d 567 (6th Cir. 2009), the Court shall enter
judgment in Plaintiff’s favor in accordance with the terms set forth in Defendants’
offer, and dismiss the case as moot. The Court retains jurisdiction over the present
dispute in the event the parties cannot agree on the costs and fees to be paid under
the Rule 68 offer. Because Plaintiff’s individual and class claims are moot, the
Court denies Plaintiff’s motion for class certification without prejudice.
I.

FACTUAL AND PROCEDURAL BACKGROUND

LIW is a Michigan professional service corporation engaged in the business
of collecting consumer debts. (Compl. ¶ 4.) Ingber is an attorney who regularly
files debt collection lawsuits against consumers.2 (Id. ¶ 5.) On January 26, 2013,

1

The Court construes Defendants’ Motion as a motion for lack of subject
matter jurisdiction pursuant to Rule 12(h)(3).
2

Plaintiff does not allege that Ingber acted in his individual capacity as
opposed to in his capacity as an agent for LIW. Rather, Plaintiff’s Complaint
2

LIW sent Plaintiff a demand letter seeking to collect an alleged debt (“Notice”).3
(Id. ¶ 13.) The Notice, which was signed by Ingber, states that Plaintiff owes a
debt to William Beaumont Hospital in the amount of $6,839.35.4 (Id. ¶¶ 14-15.)
The portion of the Notice to which Plaintiff objects provides: “This debt will
be assumed to be valid unless you dispute the validity of the debt or any portion
thereof, within 30 days after you receive this letter.” (Notice, Defs.’ Mot. Ex. A,
ECF No. 15-1.) As Plaintiff alleges in her Complaint, this statement does not
comport with the statutory requirement that a debt collection notice must contain
“a statement that unless the consumer, within thirty days after receipt of the notice,
disputes the validity of the debt, or any portion thereof, the debt will be assumed to
be valid by the by the debt collector.” (Compl. ¶ 20 (quoting 15 U.S.C. §
1692g(a)(3) (emphasis added)).)

appears to contend that LIW is vicariously liable for Ingber’s conduct because he
acted within the scope of his employment or with authorization. (Compl. ¶¶ 1011.) The Court notes, however, that employees and owners of a law firm may be
held personally liable for violations of the FDCPA provided they individually
satisfy the statute’s definition of a “debt collector.” Kistner v. Law Offices of
Michael P. Margelefsky, L.L.C., 518 F.3d 433, 435-38 (6th Cir. 2008).
3

Although Plaintiff indicates in her Complaint that a copy of the Notice is
attached as Exhibit A, it appears as though counsel neglected to attach the
document. (Compl. ¶ 17.) Defendants have, however, supplied the Court with a
copy of the Notice. (Notice, Defs.’ Mot. Ex. A, ECF No. 15-1.)
4

As counsel indicated at the motion hearing, Plaintiff has since paid the debt

in full.
3

The crux of Plaintiff’s lawsuit is that the omission of the phrase “by the debt
collector” renders the language susceptible to misinterpretation by the “least
sophisticated consumer.” See Miller v. Javitch, Block & Rathbone, 561 F.3d 588,
592 (6th Cir. 2009). For instance, without the inclusion of the “by the debt
collector” phrase, “it is possible that the consumer would not know that the debt
collector is the only entity entitled to assume the validity of the debt, or that the
collection is based on a temporary fiction that the debt is valid.” (Pl.’s Resp. 8.)
As relief for the purported FDCPA violation, Plaintiff requests that the Court
enter judgment in favor of Plaintiff and the putative class, and against LIW and
Ingber, and seeks the following relief:
a.
b.
c.
d.

An Order certifying this class action lawsuit;
Statutory Damages pursuant to 15 U.S.C. § 1692k;
Attorney’s fees, litigation expenses and costs of the instant suit;
and
Such other or further relief as the Court deems proper.

(Compl.)
On February 14, 2014, Defendants served Plaintiff with an offer of judgment
(“Offer”) pursuant to Federal Rule of Civil Procedure 68. (2/14/14 Offer, Defs.’
Mot. Ex. B, ECF No. 15-2.) This Offer “allows judgment to be taken against
Defendants and in favor of Plaintiff on the following terms:”
1.

Defendants shall pay Plaintiff the total amount of Two
Thousand One and 00/100 Dollars ($2,001.00) in full and final
satisfaction of any and all damages sought from Defendants in
this action.
4

2.

Defendants shall also pay an additional amount for reasonable
attorney’s fees and costs incurred by Plaintiff in this action.
Such fees and costs shall be in an amount agreed to by the
parties, or if they are unable to agree, as determined by the
Court upon Motion.

3.

The judgment entered in accordance with this Offer shall be in
total settlement of any and all claims by Plaintiff against
Defendants and their current and former employees, owners and
agents.

4.

Nothing in this Offer shall be construed to be an admission of
liability. Defendants expressly deny liability for the doubtful
and disputed claims set forth in this action and submit this Offer
for the sole purpose of saving litigation expenses.

5.

If this Offer is not accepted by Plaintiff within fourteen (14)
days after the date of service of the Offer as set forth below, the
Offer shall be deemed withdrawn . . . .

(Id.) Plaintiff failed to accept the Offer within the fourteen days provided, and
thus, by operation of both the Offer and Federal Rule of Civil Procedure 68, the
Offer was withdrawn. Fed. R. Civ. P. 68(b).
Plaintiff instituted the present action on December 20, 2013. Defendants
answered Plaintiff’s Complaint on February 14, 2014, the same date Plaintiff was
served with the Rule 68 Offer.
On June 16, 2014, Plaintiff filed a class certification motion pursuant to
Federal Rule of Civil Procedure 23. (ECF No. 11.) Defendants filed a motion to
dismiss or, in the alternative, for summary judgment pursuant to Federal Rules of
Civil Procedure 12(b)(1) and 56 on July 15, 2014. (ECF No. 14.) A few days
5

before the December 8, 2014 motion hearing, Plaintiff filed supplemental
authorities, specifically, two cases from the United States Court of Appeals for the
Eleventh Circuit.
II.

GOVERNING LEGAL STANDARD 5

Motions to dismiss for lack of subject-matter jurisdiction pursuant to Federal
Rule of Civil Procedure 12(b)(1) fall into two categories: facial attacks and factual
attacks. United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). The Sixth
Circuit has described these two categories of motions:
A facial attack is a challenge to the sufficiency of the
pleading itself. On such motion, the court must take the
material allegations of the petition as true and construed
in the light most favorable to the nonmoving party . . . . A
factual attack, on the other hand, is not a challenge to the
sufficiency of the pleading’s allegations, but a challenge
to the factual existence of subject matter jurisdiction. On
such a motion, no presumptive truthfulness applies to the
factual allegations . . . and the court is free to weigh the
evidence and satisfy itself as to the existence of its power
to hear the case.
Id. (internal citations omitted) (emphasis in original). This dispute implicates the
factual existence of subject matter jurisdiction.

5

As should be evident by the legal standard set forth in this section, the
Court construes Defendants’ Motion as a motion for lack of subject matter
jurisdiction pursuant to Rule 12. Given the Court’s analysis, it is unnecessary to
analyze the motion as one for summary judgment pursuant to Rule 56.
6

A plaintiff bears the burden of demonstrating that a court has jurisdiction
over the subject matter. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d
1125, 1134 (6th Cir. 1986) (citation omitted).
The Court notes that although a Rule 12(b)(1) motion is technically not the
correct procedural vehicle to challenge subject matter jurisdiction where a
defendant has already filed an answer,6 Federal Rule of Civil Procedure 12(b)(3)
permits, and indeed mandates, dismissal of a civil action if “the court determines at
6

Rule 12(b) governs the presentation of defenses, providing, in pertinent

part:
Every defense to a claim for relief in any pleading must be asserted in
the responsive pleading if one is required. But a party may assert the
following defenses by motion:
(1) lack of subject-matter jurisdiction;
(2) lack of personal jurisdiction;
(3) improper venue;
(4) insufficient process;
(5) insufficient service of process;
(6) failure to state a claim upon which relief can be granted; and
(7) failure to join a party under Rule 19.
A motion asserting any of these defenses must be made before
pleading if a responsive pleading is allowed.
Fed. R. Civ. P. 12(b). Here, Defendants filed an answer before raising the
jurisdictional challenge. This does not end the matter, however. Rule 12(h)(1) sets
forth the various defenses that may be waived by failing to assert them in a
responsive pleading or motion; implicitly recognizing that parties cannot consent
to federal subject matter jurisdiction due to its constitutional origin, Rule 12(b)(1)
motions are excluded. Indeed, Rule 12(h)(3) explicitly provides: “If the court
determines at any time that it lacks subject-matter jurisdiction, the court must
dismiss the action.”
7

any time that it lacks subject-matter jurisdiction[.]” “Except for the pre-answer
limitation on Rule 12(b)(1) motions, the distinction between a Rule 12(b)(1)
motion and a Rule 12(h)(3) motion is largely academic, and the same standards are
applicable to both types of motions.” Lary v. Rexall Sundown, Inc., No. 13-CV5769-SJF, 2015 U.S. Dist. LEXIS 16733, at *32 (E.D.N.Y. Feb. 10, 2015)
(unpublished) (internal quotation marks and quotations omitted).
III.

ANALYSIS

Defendants contend that the Court should dismiss the action for lack of
subject-matter jurisdiction under Rule 12(b)(1) on the basis that the Rule 68 Offer,
which was made prior to Plaintiff’s class certification motion, offered Plaintiff
every form of individual relief sought in her Complaint, thereby mooting her case.
In the alternative, Defendants seek summary judgment on the merits of Plaintiff’s
FDCPA claim, arguing that the Notice sufficiently apprised Plaintiff of her rights
as a debtor. Because the Court finds the first line of argumentation dispositive, it
need not, and indeed it may not, address the second. See Flast v. Cohen, 392 U.S.
83, 96, 88 S. Ct. 1942, 1950 (1968) (“And it is quite clear that ‘the oldest and most
consistent thread in the federal law of justiciability is that the federal courts will
not give advisory opinions.’” (quoting C. Wright, Federal Courts 34 (1963)).7

7

As the Court explained in Flast, “[t]he rule against advisory opinions was
established as early as 1793, see 3 H. Johnston, Correspondence and Public Papers
of John Jay 486-489 (1891), and the rule has been adhered to without deviation.
8

A.

Subject Matter Jurisdiction and the Mootness Doctrine
“Article III of the United States Constitution limits the jurisdiction of federal

courts to ‘cases’ and ‘controversies,’ U.S. Const. art. III, § 2, cl. 1, ‘a cradle-tograve requirement’ that must be satisfied at the time a plaintiff first brings suit and
that must remain satisfied throughout the life of the case, Fialka-Feldman v.
Oakland Univ. Bd. of Trs., 639 F.3d 711, 713 (6th Cir. 2011).” Hrivnak v. NCO
Portfolio Mgmt., Inc., 719 F.3d 564, 566-67 (6th Cir. 2013). One function of this
case or controversy requirement is to limit federal jurisdiction to actions in which a
litigant is able to “demonstrate that he possesses a legally cognizable interest, or
‘personal stake,’ in the outcome” of the case. Genesis Healthcare Corp. v.
Symczyk, __ U.S. __, 133 S. Ct. 1523, 1528 (2013) (quoting Camreta v. Greene,
563 U.S. __, 131 S. Ct. 2020, 2028 (2011)). “If after filing a complaint the
claimant loses a personal stake in the action, . . . the case must be dismissed as
moot.” Hrivnak, 719 F.3d at 567.
B.

Rule 68 Offer of Judgment and the Mootness Doctrine
Federal Rule of Civil Procedure 68 provides, in relevant part: “At least 14

days before the date set for trial, a party defending against a claim may serve on an
opposing party an offer to allow judgment on specified terms, with the costs then
accrued.” Fed. R. Civ. P. 68(a). Defendants claim that their unaccepted Rule 68
See United States v. Fruehauf, 365 U.S. 146, 157 (1961), and cases cited therein.”
Flast, 392 U.S. at 97 n.14, 88 S. Ct. at 1951 n.14.
9

Offer had the effect of mooting this entire action – Plaintiff’s individual and yet-tobe-certified class claims included – because it offered Plaintiff all the individual
relief she sought in her Complaint, including her requests for statutory damages
pursuant to 15 U.S.C. § 1692k and for attorney’s fees, costs, and expenses.
“To moot a case or controversy between opposing parties, an offer of
judgment must give the plaintiff everything [s]he has asked for as an individual.”
Hrivnak, 719 F.3d at 567 (emphasis in original). This rule is predicated upon the
notion that once a defendant offers to satisfy a plaintiff’s “entire demand,” there is
no dispute over which to litigate. Id. (quoting O’Brien, 575 F.3d at 574 and citing
Zinni v. E.R. Solutions, Inc., 692 F.3d 1162, 1166 (11th Cir. 2012); Friedman’s,
Inc. v. Dunlap, 290 F.3d 191, 197 (4th Cir. 2002); Rand v. Monsanto Co., 926 F.2d
596, 598 (7th Cir. 1991)). Notably, a plaintiff need not accept an offer to moot a
case; rather, “mootness occurs . . . [when] the defendant offers to provide every
form of individual relief the claimant seeks in the complaint.” Hrivnak, 719 F.3d
at 568.8
This principle is illustrated by Hrivnak, a case in which the plaintiff filed a
lawsuit pursuant to the FDCPA and the State of Ohio analogue. The defendants

8

While the Supreme Court has not “resolve[d] the question whether a Rule
68 offer that fully satisfies the plaintiff’s claims is sufficient by itself to moot the
action, . . . we note that Courts of Appeals on both sides of that issue have
recognized that a plaintiff’s claim may be satisfied even without the plaintiff’s
consent.” Genesis Healthcare, 133 S. Ct. at 1529 n.4.
10

made a Rule 68 offer of judgment to the plaintiff, who rejected the offer. On
appeal, the court examined the impact of the offer of judgment on the justiciability
of the plaintiff’s claims. The court held that the defendants’ offer of judgment did
not moot the plaintiff’s claims because the plaintiff “asked for more than $25,000,
reasonable attorneys fees and injunctive and declaratory relief. Yet the defendants
offered him $7,000 plus costs and attorneys fees. That was it.” Id. Simply stated,
the defendants did not offer complete relief.
Unlike in Hrivnak, where the defendants offered only a fraction of the relief
requested by the plaintiff, Defendants in this case demonstrated a “willingness to
meet” Plaintiff “on h[er] terms.” Id. at 567 (citing Gates v. Towery, 430 F.3d 429,
432 (7th Cir. 2005)). Plaintiff sought the following individual relief in her
Complaint: (1) statutory damages pursuant to 15 U.S.C. § 1692k(a)(2)(A), which
are not to exceed $1,000; (2) attorney’s fees, litigation expenses, and costs of the
lawsuit pursuant to § 1692k(a)(3); and (3) the entry of judgment in favor of
Plaintiff and against Defendants. In February 2014, Defendants offered Plaintiff
$2,001.00 and reasonable attorney’s fees, litigation expenses, and costs to be
determined by the parties (and, if the parties prove unable to resolve the fees and
costs, upon the filing of a motion in this Court). In addition, the Offer provided
that judgment would be entered in favor of Plaintiff and against Defendants.

11

Despite the appearance of complete relief offered by Defendants, Plaintiff
contends that Defendants’ Offer was less valuable than the possible eventual
judgment Plaintiff could obtain if her case proceeded to trial. (Pl.’s Resp. 3-4.)
This is because Defendants “conditioned their Rule 68 offer on Plaintiff’s granting
of a release of ‘any and all claims by Plaintiff against Defendants and their current
and former employees, owners and agents.’” (Id. at 3 (quoting Offer ¶ 3).) Citing
an unpublished case from the Eleventh Circuit, Plaintiff contends that “[o]bligating
the plaintiff to grant a blanket release as a condition of accepting an offer of
judgment renders that offer less valuable than an eventual judgment for the same
monetary amount but without the release condition.” (Id. (citing Danow v. Law
Office of Davie E. Borack, P.A., 367 F. App’x 22 (11th Cir. 2010) (per curiam))9.)
Further, according to Plaintiff, because the Offer does not identify LIW’s current
and former employees, owners, and agents, the Offer “contains an unreasonable
condition and violates the requirement that Rule 68 offers be unconditional.” (Id.
at 3-4 (internal quotation marks and citations omitted).)
The Court is not persuaded by these arguments, namely because principles
of res judicata, not to mention the FDCPA’s one year statute of limitation, 15
U.S.C. § 1692k(d), would preclude Plaintiff from filing another lawsuit based on
9

As Defendants point out, Danow is of limited value here. Danow involved
the propriety of an attorney’s fee award in a FDCPA case with a Rule 68 offer of
judgment. The Eleventh Circuit’s analysis of the Rule 68 offer in that case had
nothing to do with the threshold jurisdictional question presently before the Court.
12

the same Notice received in this action. Therefore, Plaintiff could not sue any
other individuals (current of former employees, owners, or agents of LIW) even if
the condition was not explicitly incorporated into Defendants’ Offer. Further, the
entry of judgment as set forth in the Offer would extinguish any other claims
Plaintiff had against Defendants in connection with the Notice at issue. In other
words, the Court rejects Plaintiff’s contention that Defendants’ Offer “is facially
defective” because it “forces Plaintiff to surrender rights she would otherwise not
surrender if she were to obtain a judgment against Defendants.”
In short, Defendants offered Plaintiff complete relief. Once Defendants did,
Plaintiff lost her personal stake in the litigation. The Court concludes that
Defendants’ Offer, which offered to provide Plaintiff with all of the individual
relief sought in her prayer for relief, rendered this case moot. Hrivnak, 719 F.3d at
567 (“To moot a case or controversy between opposing parties, an offer of
judgment must give the plaintiff everything he has asked for as an individual.”)
(emphasis in original); O’Brien, 575 F.3d at 574 (“We agree with the Seventh
Circuit’s view that an offer of judgment that satisfies a plaintiff’s entire demand
moots the case.”). Following O’Brien, the Court will enter judgment in favor of
Plaintiff in accordance with Defendants’ Rule 68 Offer. O’Brien, 575 F.3d at 575.
Before proceeding to analyze the interaction between the Court’s finding of
mootness with respect to Plaintiff’s individual claims and Plaintiff’s desire to
13

represent a class of similarly-situated individuals, the Court addresses Plaintiff’s
contentions regarding Justice Kagan’s dissent in Genesis Healthcare, 133 S. Ct.
1523. In Genesis Healthcare, the plaintiff brought a “collective action” on her
own behalf, and on behalf of other similarly situated employees, against her
employer for violating the Fair Labor Standards Act. Simultaneous with its answer
and before any other plaintiffs had opted in, the defendant made a Rule 68 offer of
judgment in the amount of $7,500 plus reasonable attorney’s fees, contingent upon
the offer being accepted in ten days. The district court recognized that the plaintiff
had let the offer lapse – as Plaintiff did in this case – but granted the defendant’s
motion to dismiss for lack of subject matter jurisdiction. On appeal, the United
States Court of Appeals for the Third Circuit, among other things, ruled that the
plaintiff’s individual claim was moot. The case eventually reached the Supreme
Court of the United States. In a 5-4 decision, the majority noted that the plaintiff
had conceded in the trial court that “an offer of complete relief will generally moot
[a] claim.” Id. at 1529. Due to this concession, the majority expressly declined to
reach the mootness issue, and assumed without deciding that a plaintiff’s claim
will become moot following an unaccepted Rule 68 offer of judgment that would
provide the plaintiff with complete relief. Id. at 1529, 1532.
In a dissent joined by three other Justices, Justice Kagan addressed the issue
that the majority declined to address. Id. at 1532 (Kagan, J., dissenting). Relying
14

on the language of Rule 68 to explain that courts have no power under that rule to
enter judgment on an unaccepted offer of judgment, Justice Kagan wrote:
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. As every first-year law student learns, the recipient’s
rejection of an offer leaves the matter as if no offer had ever been
made. Nothing in Rule 68 alters that basic principle; to the contrary,
that rule specifies that an unaccepted offer is considered withdrawn.
So assuming the case was live before -- because the plaintiff had a
stake and the court could grant relief -- the litigation carries on,
unmooted.
Id. at 1533-34 (citations, quotation marks, and alterations omitted). Justice Kagan
admonished lower courts as follows: “So a friendly suggestion to the Third Circuit:
Rethink your mootness-by-unaccepted-offer theory. And a note to all other courts
of appeals: Don’t try this at home.” Id. at 1534. Post-Genesis Healthcare
jurisprudence in both the circuit courts and the district courts has taken a favorable
view of Justice Kagan’s dissent. See, e.g., Jeffrey M. Stein, D.D.S., M.S.D., P.A. v.
Buccaneers L.P., 772 F.3d 698 (11th Cir. 2014).
Irrespective of the persuasive value of Justice Kagan’s dissent, the Sixth
Circuit has, as discussed above, decided the issue, holding that an unaccepted offer
of judgment, such as the Offer made here, can moot a case. O’Brien, 575 F.3d at
574. This Court lacks the authority to render a decision contrary to the holdings of
the Sixth Circuit absent such precedent being overturned by the Supreme Court
15

itself. See, e.g., Darrah v. City of Oak Park, 255 F.3d 301, 309 (6th Cir. 201)
(explaining that a published Sixth Circuit opinion is controlling authority and
binding on subsequent panels unless inconsistent with a Supreme Court decision).
In light of the Genesis Healthcare majority’s express declination to address the
subject, this Court is bound by O’Brien.10 It follows that the Court must reject
Plaintiff’s contentions regarding Plaintiff’s rejection of Defendants’ Offer.
B.

Effect of Mootness Finding on Class Claims
Plaintiff’s Complaint identifies the lawsuit as one that will eventually seek

class action certification.11 However, Plaintiff did not file a Rule 23 motion for
class certification until June 16, 2014, approximately four months after Defendants
made their Rule 68 Offer. Because Plaintiff’s case was rendered moot by
10

The Honorable Avern Cohn of the United States District Court for the
Eastern District of Michigan has also confronted the mootness-by-unaccepted-offer
theory, and, finding himself constrained by Sixth Circuit precedent despite Justice
Kagan’s dissent in Genesis Healthcare, dismissed the plaintiff’s claims as moot.
See Hanover Grove Consumer Housing Coop. v. Berkadia Commercial Mortgage,
LLC, No. 13-13553, 2014 U.S. Dist. LEXIS 11918 (E.D. Mich. Jan. 31, 2014)
(unpublished).
11

The proposed class includes:

(i) All persons with addresses in the State of Michigan (ii) to whom
letters in substantially the same form as Exhibit “A” were sent (iii) in
an attempt to collect a medical related debt incurred to William
Beaumont Hospital (iv) which were not returned undelivered by the
U.S. Post Office (v) during the one year period prior to filing of the
original complaint in this action through the date of certification.
(Pl.’s Class Certification Br. 1.)
16

Defendants’ offer of complete relief in February of 2014, Plaintiff’s federal case
was over in February, prior to the filing of the class certification motion.
Although the Sixth Circuit did not have the occasion in Hrivnak to reach the
issue of whether once a named plaintiff’s claims are mooted through a Rule 68
offer of judgment prior to class certification, the uncertified class claims must be
dismissed as moot, the Sixth Circuit has addressed the issue in other settings. In
Brunet v. City of Columbus, 1 F.3d 390 (6th Cir. 1993), the Sixth Circuit
explained:
Once a class is certified, the mooting of the named plaintiff’s claim
does not moot the action, and the Court continues to have jurisdiction
to hear the merits of the action if a controversy between any class
member and the defendant exists. Where, on the other hand, the
named plaintiff’s claim becomes moot before certification, dismissal
of the action is required.
Id. at 399 (emphases in original). Other courts have reached a similar outcome,
dismissing uncertified class actions following the dismissal of a named plaintiff’s
claims. In a case presenting a similar procedural posture to this case, the Seventh
Circuit held that an offer of judgment made to a named plaintiff prior to the filing
of a class certification motion mooted not only the plaintiff’s individual claims, but
also the yet-to-be-certified class claims presented in the complaint. Damasco v.
Clearwire Corp., 662 F.3d 891, 896 (7th Cir. 2011). The court indicated that the
fact “[t]hat the complaint identifies the suit as a class action is not enough by itself
to keep the case in federal court.” Id. This is because “[t]o allow a case, not
17

certified as a class action . . . , to continue in federal court when the sole plaintiff
no longer maintains a personal stake defies the limits on federal jurisdiction
expressed in Article III.” Id. (citations omitted).
The Court finds Damasco’s jurisdictional analysis persuasive. When a
named plaintiff’s claims become moot prior to the certification of a class, such as
Plaintiff’s claims here, the plaintiff lacks any personal interest in representing
others in the action and the action must therefore be dismissed.12 Accordingly, the

12

Defendants cite Genesis Healthcare, which held that “in the absence of
any claimant’s opting in, respondent’s suit became moot when her individual claim
became moot, because she lacked any personal interest in representing others in
this case[,]” as leading to this result. 133 S. Ct. at 1529. Genesis Healthcare is not
directly on point, as the case addressed the justiciability question in a collective
action case pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §
216(b), not a Rule 23 class action. Indeed, the Court noted that “Rule 23 actions
are fundamentally different from collective actions under the FLSA[.]” Id. at
1529. Despite this distinction, however, the Court agrees that Genesis Healthcare
is persuasive, particularly because Plaintiff does not argue, for instance, that
FDCPA claims 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 interest expires.” Id. Even if Plaintiff had made such an argument,
however, the Court notes that in Genesis Healthcare, the Supreme Court held that
its cases invoking the “inherenetly transitory” relation-back rationale did not apply
because the “inherently transitory” rationale “was developed to address
circumstances in which the challenged conduct was effectively unreviewable,
because no plaintiff possessed a personal stake in the suit long enough for litigation
to run its course.” Id. at 1531. “But this doctrine has invariably focused on the
fleeting nature of the challenged conduct giving rise to the claim, not on the
defendant’s litigation strategy.” Id. Indeed, the Court expressly excluded claims
seeking damages from conduct falling under the “effectively unreviewable”
category. Id. (“Unlike claims for injunctive relief challenging ongoing conduct, a
claim for damages cannot evade review[.]”). Thus, the cases on which Plaintiff
relies invoking the inherently transitory rationale to in effect “save” putative class
18

Court does not have jurisdiction over the putative class claims, as Plaintiff no
longer retains a sufficient stake in the litigation to represent the interests of the
class she wishes to represent.
IV.

CONCLUSION AND ORDER

For the reasons stated herein, the Court concludes that Defendants’ Offer of
Judgment mooted both Plaintiff’s individual and class claims, thereby depriving
this Court of jurisdiction over the action. The Court therefore GRANTS
Defendant’s Motion and DENIES Plaintiff’s motion for class certification
pursuant to Rule 23.
Pursuant to the rule articulated in O’Brien, 575 F.3d at 575, the Court will
enter judgment in favor of Plaintiff and against Defendants in accordance with the
terms of Defendants’ Rule 68 Offer of Judgment. The Court retains jurisdiction
over the limited issue of the amount of costs and fees to be awarded to Plaintiff by
Defendants in the unlikely event the parties are unable to resolve the issue without
resort to the judicial process.
Plaintiff may file a petition for costs and/or attorney’s fees within twentyone (21) days of the issuance of this Opinion and Order. A response and reply may
be filed in accordance with the Court’s Local Rules. If the parties stipulate to the

actions for statutory damages from being mooted by an offer of judgment are, at
best, questionable.
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costs and/or attorney’s fees, the stipulation must be submitted to the Court within
twenty-one (21) days of the issuance of this Opinion and Order.
IT IS SO ORDERED.
Dated: March 27, 2015
s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE
Copies to:
Adam S. Alexander, Esq.
Scott D. Owens, Esq.
Charity A. Olson, Esq.

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