Geismann v. ZocDoc, Inc.
OPINION & ORDER: ZocDoc's motion (Dkt. No. 69) for leave to deposit $13,900.00 with the Clerk of Court, to be held with the $6,100.00 already deposited, payable to the plaintiff to secure a $20,000.00 judgment in favor of plaintiff, with a satisfactory form of consent to the entry of an injunction, and thereafter to follow the procedures for filing a motion for summary judgment, is granted. (Signed by Judge Louis L. Stanton on 7/28/2017) (ap)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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RADHA GEISMANN, M.D., P.C.,
14 Civ. 7009 (LLS)
- against OPINION & ORDER
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Defendant ZocDoc, Inc. requests leave to deposit $13,900.00
with the Clerk of Court and to move for summary judgment.
the following reasons, ZocDoc's request is granted.
In 2014, plaintiff Radha Geismann, M.D., P.C., a Missouri
professional corporation, filed a complaint in Missouri state
court, alleging that it received two unsolicited faxes from
ZocDoc, in violation of the Telephone Consumer Protection Act of
1991 ("TCPA"), 47 U.S.C.
227, which, inter alia, prohibits the
use of "any telephone facsimile machine, computer, or other
device to send, to a telephone facsimile machine, an unsolicited
advertisement," unless "the unsolicited advertisement is from a
sender with an established business relationship," the recipient
volunteered its number to the sender, or the fax meets certain
other notice requirements.
227 (b) (1) (C).
Geismann seeks between $500.00 and $1,500.00 for each
alleged TCPA violation, an injunction prohibiting ZocDoc from
sending similar faxes in the future, and costs.
motion for class certification.
It also filed a
On March 13, 2014, ZocDoc
removed the action to the United States District Court for the
District of Missouri.
Two weeks later, ZocDoc made an offer of
judgment pursuant to Fed. R. Civ. P. 68(a) for $6,000.00, plus
reasonable attorney's fees, and an injunction prohibiting it
from sending Geismann similar faxes in the future.
On April 8,
Geismann rejected the offer.
On April 18, 2014, ZocDoc moved to transfer the action to
the United States District Court for the Southern District of
New York pursuant to 28 U.S.C. § 1404(a), which the court
ZocDoc then moved to dismiss the complaint, arguing
that its offer of judgment satisfied all of Geismann's claims,
thereby mooting the action.
On September 26, 2014, I granted ZocDoc's motion and
entered judgment, holding that its offer of judgment "more than
satisfies any recovery Geismann could make under the applicable
statute" and as a result, "there remains no case or controversy
before the Court."
Geismann v. ZocDoc, Inc., 60 F. Supp. 3d
(S.D.N.Y. 2014), vacated and remanded, 850 F.3d 507
(2d Cir. 2017).
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On January 20, 2016, during the pendency of Geismann's
appeal to the Second Circuit, the Supreme Court decided
Campbell-Ewald Co. v. Gomez,
, 136 S. Ct. 663
(2016), which resolved a circuit split over whether a
defendant's unaccepted offer of judgment pursuant to Fed. R.
Civ. P. 68 in full satisfaction of a plaintiff's claim moots
that plaintiff's claim so as to deprive a federal court of the
Article III "cases" and "controversies" jurisdictional
In Campbell-Ewald, respondent Jose Gomez sued for
damages pursuant to the TCPA for unsolicited text messages he
received from petitioner Campbell.
Id. at 667.
agreed-upon deadline for Gomez to file for class certification,
Campbell made an offer of settlement pursuant to Fed. R. Civ. P.
It offered to pay Gomez costs, excluding attorney's
and $1,503.00 for every unsolicited text message Gomez
could show he had received.
Id. at 668.
Campbell also proposed
an injunction barring it from sending further text messages in
violation of the TCPA.
Gomez allowed Campbell's offer to
expire after the fourteen days specified in Rule 68.
Campbell then moved for summary judgment pursuant to Fed. R.
Civ. P. 12 (b) (1).
It argued that its offer mooted Gomez's
claims and accordingly, there remained no Article III case or
controversy to adjudicate.
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Holding that such an unaccepted offer does not moot an
action, the majority adopted Justice Kagan's dissent in Genesis
Healthcare Corp. v. Symczyk, 569 U.S. 66, 133 S. Ct. 1523, 1532
(Kagan, J., dissenting):
"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 firstyear law student learns, the recipient's rejection of
an offer 'leaves the matter as if no offer had ever
Minneapolis & St. Louis R. Co. v.
Columbus Rolling Mill, 119 U.S. 149, 151 [7 S. Ct.
168, 30 L. Ed. 376] (1886).
Nothing in Rule 68 alters
that basic principle; to the contrary, that rule
specifies that '[a]n unaccepted offer is considered
Fed. Rule Civ. Proc. 68(b).
the case was live before--because the plaintiff had a
stake and the court could grant relief--the litigation
carries on, unmooted." Ibid.
Campbell-Ewald, 136 S. Ct. at 670, 193, quoting Genesis
Healthcare, 133 S. Ct. at 1532 (Kagan, J., dissenting).
The Supreme Court also raised a hypothetical which it
declined to 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."
Id. at 672.
On February 1, 2016, ZocDoc requested leave to deposit
$6,100.00 with the Clerk in satisfaction of its offer of
I granted its request, noting "No principle or
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authority appears to prevent compliance with an unstayed
judgment, even one under appeal."
Dkt. No. 62.
On February 5,
2016, ZocDoc deposited $6,100.00 with the Court's Clerk's
Office, where it remains.
On March 9, 2017, the Second Circuit reversed and remanded
my September 26, 2014 order and judgment, stating (850 F.3d at
(brackets and alterations in original):
While this appeal was pending before us, the Supreme
Court decided Campbell-Ewald.
Its decision made clear
that an unaccepted Rule 68 offer of judgment does not
render an action moot.
Campbell-Ewald, 136 S. Ct. at
Because that decision controls our review and
is dispositive of the case at bar, we need not, and
decline to, reach the issues raised by Geismann in its
In Campbell-Ewald, the plaintiff sought individual and
class-wide relief under the TCPA, alleging that he and
members of the putative class received unsolicited
text messages sent by the defendant in violation of
the statute. Id. at 667.
The defendant, like ZocDoc,
"proposed to settle [the plaintiff's] individual claim
and filed an offer of judgment pursuant to Federal
Rule of Civil Procedure 68," including an offer to pay
"costs, excluding attorney's fees, and $1,503 per
message," as well as "a stipulated injunction in which
[the defendant] agreed to be barred from sending text
messages in violation of the TCPA." Id. at 667-68.
The plaintiff, like Geismann, declined the offer.
The Supreme Court concluded that an Article
III "case" or "controversy" remained, Rule 68 offer
notwithstanding, because "[a]n unaccepted settlement
offer--like any unaccepted contract offer--is a legal
nullity, with no operative effect." Id. at 670
(quoting Genesis Healthcare Corp. v. Symczyk, --- U.S.
----, 133 S. Ct. 1523, 1533, 185 L.Ed.2d 636 (2013)
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(Kagan, J., dissenting)).
"[W]ith 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 light of Campbell-Ewald, the district court's
conclusion in this case that Geismann's claim was
"mooted by the amount and content of the Rule 68 offer
made by ZocDoc," Geismann, 60 F. Supp. 3d at 407, is
Rule 68 provides that, "[a]t 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).
plain purpose of Rule 68 is to encourage settlement
and avoid litigation." Marek v. Chesny, 473 U.S. 1,
5, 105 S. Ct. 3012, 87 L.Ed.2d 1 (1985).
offeree decline the offer, however, it "is considered
withdrawn." Fed. R. Civ. P. 68(b).
makes clear that such a "withdrawn" offer "ha[s] no
continuing efficacy." 136 S. Ct. at 670.
court's entry of judgment, therefore, imbued ZocDoc's
offer with a power it did not possess.
The district court's conclusion in the case now before
us is, of course, understandable, it having been
reached before Campbell-Ewald was decided.
And, as we
have noted, "our prior case law has not always been
entirely clear on this subject." Tanasi, 786 F.3d at
The district court also followed the "typically
proper" procedure by "enter[ing] judgment against the
defendant for the proffered amount and [ ] direct[ing]
payment to the plaintiff consistent with the offer."
Cabala v. Crowley, 736 F.3d 226, 228 (2d Cir. 2013)
(per curiam) .
But the basis upon which the district
court entered judgment did not exist:
Rule 68 offer of judgment does not render an action
The Second Circuit cautioned that Rule 23 being
"harmonized" with Rule 68 might impair the hypothetical's
application to class actions:
We note, without deciding because the situation is not
before us, that an attempt by the defendant to use the
tactic described in the Campbell-Ewald hypothetical to
"place [it] in the driver's seat," 136 S. Ct. at 672,
might not work.
The Supreme Court's criticism of
similar tactics suggests that Rule 68 should be
harmonized with Rule 23.
See id. (describing a
"kindred strategy" intended to "avoid a potential
adverse decision" as a "gambit"); cf. Genesis
Healthcare, 133 S. Ct. at 1536 (Kagan, J., dissenting)
(stating that a court should not "short-circuit" a
statutory collective action "by acceding to a
defendant's proposal to make only the named plaintiff
The Supreme Court has also acknowledged that
"[r]equiring multiple plaintiffs to bring separate
actions, which effectively could be 'picked off' by a
defendant's tender of judgment before an affirmative
ruling on class certification could be obtained
obviously would frustrate the objectives of class
actions," and "would invite waste of judicial
resources by stimulating successive suits brought by
others claiming aggrievement." Deposit Guar. Nat'l
Bank v. Roper, 445 U.S. 326, 339, 100 S. Ct. 1166, 63
L.Ed.2d 427 (1980).
However, we need not, and
therefore do not, weigh in on whether further
maneuvers by the defendant might render a motion to
dismiss viable. We do no more than observe the
obvious: an attempt to make use of the hypothetical
posited in Campbell-Ewald is not guaranteed to bear
Id. at 515, n.B
(brackets in original).
On April 26, 2017, ZocDoc requested a pre-motion
conference, in accordance with my individual practices, to
"perfect the hypothetical contemplated by the Supreme Court in
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Campbell-Ewald and the Second Circuit in Geismann."
Specifically, to fully resolve Geismann's individual
claims, ZocDoc hereby makes an open-ended offer to
Geismann with no expiration date of a total of
$20,000.00 (twenty thousand dollars) and for all
individual injunctive relief Geismann seeks in the
operative complaint, including but not limited to an
injunction barring ZocDoc from ever sending any fax of
any kind to Geismann in the future.
Dkt No. 69 at 2.
After ZocDoc deposits the additional $13,900.00
(thirteen thousand nine hundred dollars), ZocDoc will
seek to perfect the Campbell-Ewald hypothetical by
filing a motion for summary judgment in which it will
ask the Court to enter a judgment in favor of Geismann
and against ZocDoc for the full amount of Geismann's
individual claims and to dismiss the class allegations
Id. at 3.
On May 2, Geismann filed its opposition to ZocDoc's
Dkt. No. 70 at 1.
Campbell-Ewald is significant here not only for what it
did, but also for what each justice stressed it did not decide.
The majority reserved the question of "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."
136 S. Ct. at 672.
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Since Campbell-Ewald, courts have been split on that issue.
Compare Gray v. Kern, 143 F. Supp. 3d 363, 367
(D. Md. 2016)
measure which makes absolutely clear that the defendant will pay
the complete relief the plaintiff can recover and that the
plaintiff will be able to receive that relief will moot the
issue in controversy"), S. Orange Chiropractic Ctr. v. Cayan, 15
Civ. 13069 (PBS), 2016 WL 1441791, at *5 (D. Mass. Apr. 12,
("I conclude that this named plaintiff no longer has the
requisite 'live claim' because Defendant has offered to deposit
a check with the court
Servs., 13 Civ. 5794
."), and Leyse v. Lifetime Entm't
(AKH), 171 F. Supp. 3d 153, 155 (S.D.N.Y.
679 F. App'x 44
(2d Cir. 2017),
defendant has furnished full relief, there is no basis for the
plaintiff to object to the entry of judgment in its favor"),
with Bais Yaakov of Spring Valley v. Educ. Testing Serv.,
, 13 Civ. 4577
(S.D.N.Y. May 8, 2017)
1906890, at *14
("the Court concludes that a
representative plaintiff's claim is not mooted where a defendant
tenders complete individual relief, even where no class has yet
been certified"), and Bell v. Survey Sampling Int'l, LLC, 15
Civ. 1666 (MPS), 2017 WL 1013294, at *5
(D. Conn. Mar. 15, 2017)
("I join the many other courts, including courts in this
Circuit, in concluding that full tender does not moot a putative
class action prior to a decision on class certification.").
I agree with those cases finding that a defendant's full
tender renders the action moot.
There is a consequential
difference between on the one hand a defendant's offer of an
adequate amount in an offer of judgment whose utility depends on
its being timely accepted under principles of contract and Fed.
R. Civ. P. 68, and on the other hand a tender ("A valid and
sufficient offer of performance; specif., an unconditional offer
of money or performance to satisfy a debt or obligation"
Black's Law Dictionary 1696 (lOth ed. 2014)) which independently
and fully satisfies a plaintiff's claim, not because of
plaintiff's agreement but because full payment extinguishes the
That is the principle which underlies the declaration
imprinted on each Federal Reserve note:
"This note is legal
tender for all debts, public and private."
In Campbell-Ewald, the majority reserved (for a case
presenting it) the question whether a tender moots a plaintiff's
claim (136 S. Ct. at 672); the remaining four justices insisted
that tendering payment moots an action.
concurred only because "
. a mere offer of the sum owed is
insufficient to eliminate a court's jurisdiction to decide the
case to which the offer related" (id. at 674), unlike "a fully
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tendered offer that extinguished the tax debt under California
Id. at 677.
joined by Justice Alito and
Justice Scalia, dissented, basically because "the federal courts
exist to resolve disputes, not to rule on a plaintiff's
entitlement to relief already there for the taking."
"If the defendant is willing to give the plaintiff
everything he asks for, there is no case or controversy to
adjudicate, and the lawsuit is moot."
Id. at 682.
were any "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 681.
Justice Alito noted
in his own dissent "outright payment is the surest way for a
defendant to make the requisite mootness showing."
Id. at 684.
ZocDoc's proposal presents precisely those facts.
permission to deposit a total of $20,000.00 with the Clerk of
The additional $13,900.00 it seeks to deposit brings the
total to an amount far exceeding any Geismann could recover
under the statute.
Campbell-Ewald, 136 S. Ct. at 683 (Alito,
. a defendant may extinguish a plaintiff's
personal stake in pursuing a claim by offering complete relief
on the claim, even if the plaintiff spurns the offer.
Article III precedents make clear that, for mootness purposes,
there is nothing talismanic about the plaintiff's acceptance.")
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in the analysis:
There is no occasion to harmonize Rule 68
the matter is not one of contract, but of
The Second Circuit, affirming the district court's entry of
judgment, held in a summary order that Campbell-Ewald did not
overturn prior case law permitting the court to enter judgment
under the same circumstance (Leyse, 679 F. App'x at 47-48)
(emphasis and alterations in original):
Leyse contends that the district court erred in
entering judgment on his individual claim upon
Lifetime's depositing with the clerk of court the full
amount of damages and costs recoverable by Leyse under
the TCPA, even though Leyse had not accepted
Lifetime's Fed. R. Civ. P. 68 offer of judgment in
The argument is defeated by precedent.
While an unaccepted Fed. R. Civ. P. 68 offer for
complete relief does not moot a case-that is, it does
not strip the district court of jurisdiction over the
case-such an offer, if rejected, may nonetheless
permit a court to enter a judgment in the plaintiff's
See Tanasi v. New All. Bank, 786 F.3d 195,
200-201 (2d Cir. 2015); Cabala v. Crowley, 736 F.3d
226, 228 (2d Cir. 2013).
Leyse argues that Campbell-Ewald Co. v. Gomez, --U.S. ----, 136 S. Ct. 663, 193 L.Ed.2d 571 (2016),
abrogated these precedents. The argument fails
because Campbell-Ewald Co. held only that "an
unaccepted settlement offer or offer of judgment does
not moot a plaintiff's case," and therefore a district
court "retain[s] jurisdiction" to adjudicate it.
In so holding, the Court expressly stated
that its holding did not extend to cases in which a
defendant "deposits the full amount of the plaintiff's
individual claim in an account payable to the
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plaintiff, and the court then enters judgment for the
plaintiff in that amount." Id.
Because that is the
precise scenario at issue here, we conclude that
Campbell-Ewald Co. does not undermine the controlling
effect of Tanasi and similar precedents permitting the
entry of judgment under these circumstances. We
therefore affirm the district court's entry of
judgment on Leyse's individual claim.
Thus on authority, and sound principles applied in the
Second Circuit summary order after Campbell-Ewald, when ZocDoc
has deposited with the Clerk of Court an additional $13,900.000
comprising an amount securing a judgment satisfying all of
Geismann's monetary claims, and an unconditional consent to a
proper form of injunction, it can make a cognizable, good-faith
argument that this case should be terminated.
The relevant law
will no longer be that of contract, offer and acceptance, or
Rule 68; it will be the Constitutional requirement of a case or
ZocDoc's motion (Dkt. No. 69) for leave to deposit
$13,900.00 with the Clerk of Court, to be held with the
$6,100.00 already deposited, payable to the plaintiff to secure
a $20,000.00 judgment in favor of plaintiff, with a satisfactory
form of consent to the entry of an injunction, and thereafter to
follow the procedures for filing a motion for summary judgment,
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Dated: New York, N.Y.
July 28, 2017
Louis L. Stanton
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