Sandusky Wellness Center, LLC v. Medtox Scientific, Inc. et al

Filing 59

ORDER denying 34 Motion to Dismiss for Lack of Jurisdiction; denying 56 Motion for Leave to File a Response.(Written Opinion). Signed by Senior Judge David S. Doty on 7/18/2013. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-2066(DSD/SER)
Sandusky Wellness Center LLC,
a Ohio limited liability company,
individually and as the
representative of a class of
similarly-situated persons,
Plaintiff,
ORDER

v.
Medtox Scientific, Inc.,
Medtox Laboratories, Inc. and
John Does 1-10,
Defendants.

Garrett D. Blanchfield, Jr., Esq. and Reinhardt, Wendorf
& Blanchfield, 332 Minnesota Street, Suite E-1250, St.
Paul, MN 55101 and Brian Wanca, Esq., Ryan M. Kelly, Esq.
and Anderson and Wanca, 3701 Algonquin Road, Suite 760,
Rolling Meadows, IL 60008, counsel for plaintiff.
Jeffrey R. Mulder, Esq. and Lewis A. Remele, Jr., Esq.
and Bassford Remele, PA, 33 South Sixth Street, Suite
3800, Minneapolis, MN 55402 and Geoffrey W. Castello,
Esq., Robert I. Steiner, Esq. and Kelley, Drye & Warren
LLP, 101 Park Avenue, New York, NY 10178, counsel for
defendants.

This matter is before the court upon the motion to dismiss by
defendants Medtox Scientific, Inc. and Medtox Laboratories, Inc.
(collectively, Medtox) and the motion for leave to file a response
by plaintiff Sandusky Wellness Center, LLC (Sandusky).

Based on a

review of the file, record and proceedings herein, and for the
following reasons, the motions are denied.

BACKGROUND
The background of this action is fully set out in the court’s
March 12, 2013, order, and the court recites only those facts
necessary for the disposition of the instant motion. On August 23,
2012, Sandusky filed a putative class-action complaint, alleging a
violation of the Telephone Consumer Protection Act (TCPA).

On the

following day, Sandusky filed a motion for class certification. On
October 15, 2012, Medtox moved to dismiss. The court, on March 12,
2013, denied Medtox’s motion to dismiss and denied Sandusky’s
motion for class certification without prejudice.
On May 8, 2013, Medtox made a Rule 68 offer of judgment to
Sandusky in the amount of $3500.
37.

See Castello Decl. Ex. A, ECF No.

Medtox’s offer of judgment did not, however, address or

include class-wide relief.

See id.

On May 9, 2013, Medtox filed

a second motion to dismiss, arguing that Sandusky had been offered
complete relief on its individual claim, and that it no longer had
a

personal

stake

in

the

outcome

of

the

litigation,

thereby

rendering the action moot.
Instead of filing an opposition memorandum, Sandusky filed a
motion to strike Medtox’s motion to dismiss.
Magistrate

Judge

Steven

E.

Rau

denied

the

On June 13, 2013,
motion

to

strike.

Thereafter, on June 17, 2013, Sandusky filed an untimely memorandum
in opposition to the motion to dismiss.

Two days later, on June

19, 2013, Sandusky also filed a motion for leave to file its

2

untimely responsive memorandum.

The court held oral argument on

June 21, 2013, where it denied the motion for leave to file an
opposition

memorandum

and

took

the

motion

to

dismiss

under

advisement.1

DISCUSSION
“Federal courts are courts of limited jurisdiction,” and
jurisdiction

is

lacking

when

an

controversy” is no longer present.
Inc.

v.

omitted).

Pena,

42

The

F.3d

1169,

plaintiff

“actual,

ongoing

case

or

Neighborhood Transp. Network,

1172

(8th

typically

Cir.

must

1994)

(citation

demonstrate

that

jurisdiction is proper. See Osborn v. United States, 918 F.2d 724,
729-30 (8th Cir. 1990).

Here, however, the “heavy burden of

proving mootness” falls on the defendant as the party asserting
that the case has become moot.

Kennedy Bldg. Assocs. v. Viacom,

Inc., 375 F.3d 731, 745 (8th Cir. 2004) (citation and internal
quotation marks omitted).

A case becomes moot when the plaintiff

receives all relief requested in the complaint and no longer has a
“personal stake in the outcome of the lawsuit.”

Spencer v. Kemna,

523 U.S. 1, 7 (1998) (citations and internal quotation marks
omitted).

1

The court did, however, allow Sandusky to argue and create
an oral record at the June 21, 2013, hearing.
3

Under Rule 68, a defendant “may serve ... an offer to allow
judgment on specified terms, with the costs then accrued.” Fed. R.
Civ. P. 68(a).

“[A]s a general matter, a Rule 68 offer that

provides complete relief to the plaintiff renders the plaintiff’s
claims moot, even if the plaintiff refuses the offer.”

Harris v.

Messerli & Kramer, P.A., No. 06-CV-4961, 2008 WL 508923, at *2 (D.
Minn. Jan.

2,

2008)

(citations

omitted);

see

Weiss

v. Regal

Collections, 385 F.3d 337, 342 (3d Cir. 2004); Rand v. Monsanto
Co., 926 F.2d 596, 597-98 (7th Cir. 1991); Zimmerman v. Bell, 800
F.2d 386, 390 (4th Cir. 1986).
Here, Medtox argues that the action is moot because its offer
of judgment exceeds the maximum individual recovery available to
Sandusky.2

In support, Medtox cites Genesis HealthCare Corp. v.

Symczyk, 133 S. Ct. 1523 (2013), which held that a Rule 68 offer of
judgment that satisfies the named plaintiff’s claim can moot an
action brought under the Fair Labor Standards Act (FLSA), if no
other claimants have “opted in.”

Id. at 1529.

Sandusky responds

that Genesis is inapposite, as its applicability is limited to FLSA
collective actions.

The court agrees.

Although Genesis declined to “resolve the question of whether
a Rule 68 offer that fully satisfies the plaintiff’s claims [in the

2

The court assumes, without deciding, that Medtox’s $3500
settlement offer exceeds what Sandusky could recover in an
individual
action
under
the
TCPA.
See
47
U.S.C.
§ 227(b)(3)(B)(explaining that maximum recovery is greater of $500
for each violation or plaintiff’s actual monetary damages).
4

Rule 23 context] is sufficient by itself to moot the action,” id.
at 1529 n.4, it noted several differences between collective and
class

actions.

Specifically,

the

Court

distinguished

FLSA

collective actions from class actions, explaining that in the
former, “conditional certification does not produce a class with an
independent legal status,” whereas a “putative class acquires an
independent legal status once it is certified under Rule 23.”
at 1530 (citation and internal quotation marks omitted).

Id.

In doing

so, the Court ignored Rule 23 precedent, explaining that “these
cases are inapposite ... because Rule 23 actions are fundamentally
different from collective actions under the FLSA.”

Id. at 1529.

In other words, Genesis is inapplicable to a Rule 23 action brought
under the TCPA.

See, e.g., Chen v. Allstate Ins. Co., No. C 13-

0685, 2013 WL 2558012, at *7 (N.D. Cal. June 10, 2013) (finding
that Genesis “is not directly applicable to the class action
context”); Falls v. Silver Cross Hosp. & Med. Ctrs., No. 13 C 695,
2013 WL 2338154, at *1 (N.D. Ill. May 24, 2013) (same).
Having

concluded

that

Genesis

is

inapposite,

the

court

examines whether a Rule 68 offer that provides no class-wide relief
but exceeds the named plaintiff’s maximum individual recovery will
moot the action.

The Eighth Circuit provides that “[j]udgment

should be entered against a putative class representative on a
defendant’s offer of payment only where class certification has
been properly denied and the offer satisfies the representative’s

5

entire demand for injuries and costs of the suit.”
UtiliCorp

United,

Inc.,

(citations omitted).

84

F.3d

1525,

1539

(8th

Alpern v.
Cir.

1996)

To moot the claim of a putative class

representative, a Rule 68 offer must provide complete relief for
both the individual and class claims.

See, e.g., Harris, 2008 WL

508923, at *3 (holding that a Rule 68 offer which does not offer
class-wide relief to a putative class representative does not moot
the action); Jancik v. Cavalry Portfolio Servs., LLC, No. 06-3104,
2007 WL 1994026, at *4 (D. Minn. July 3, 2007) (same).
Here, Sandusky filed a putative class-action complaint, and
Medtox’s offer of judgement failed to provide class-wide relief.
As a result, the offer does not provide complete relief, and does
not moot the action.

Therefore, dismissal is not warranted.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED:
1.

Defendants’ motion to dismiss [ECF No. 34] is denied; and

2.

Plaintiff’s motion for leave to file a response [ECF No.

56] is denied.
Dated:

July 18, 2013
s/David S. Doty
David S. Doty, Judge
United States District Court

6