Harter v. Avery Scott, L.L.C.

Filing 36

MEMORANDUM. An appropriate order will enter. Signed by District Judge Kevin H. Sharp on 6/9/11. (tmw)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
LYNN HARTER individually and
on behalf of all others similarly situated,

Plaintiff,
v.
BEACH OIL COMPANY, INC.,

Defendant.

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No. 3:10-0968
JUDGE SHARP

MEMORANDUM
Pending before the court is a Motion to Amend the April 15, 2011 Order to Provide for
Interlocutory Appeal1 (Docket Entry No. 32) filed by Defendant Beach Oil Company, Inc., to
which Plaintiff Lynn Harter has filed a response (Docket Entry No. 34).
For the reasons discussed below, Defendant’s motion will be granted and certified for
interlocutory appeal on the issue of whether Defendant’s Fed. R. Civ. P. 68 Offer of Judgment
completely satisfies Plaintiff’s individual claims, requiring dismissal for lack of jurisdiction
under Fed. R. Civ. P. 12(b)(1), in an uncertified, putative class action where there is no pending
motion for class certification.

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Although Defendant labels its motion as a “Motion to Amend the April 15, 2011 Order to
Provide for Interlocutory Appeal”, the only amendment Defendant seeks is “a statement
[included in the Order] certifying [it] for interlocutory appeal.” (See Docket Entry No. 33 at 1).
Consequently, the court will treat Defendant’s filing as a 28 U.S.C. § 1292(b) motion for leave to
bring an interlocutory appeal.
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PROCEDURAL HISTORY
Plaintiff has filed a class action suit on behalf of herself and all others similarly situated
seeking damages for Defendant’s alleged violations of 15 U.S.C. § 1693 et seq., which is
commonly known as the Electronic Fund Transfer Act and 12 C.F.R. § 205 et seq. (“EFTA”).2
Plaintiff alleges she, and each member of the proposed class, were illegally charged an
ATM fee as a result of Defendant’s failure to comply with the ATM fee notice requirements of
the EFTA. Plaintiff does not seek actual damages, but seeks statutory damages, costs and
attorney’s fees under 15 U.S.C. §1693m of the EFTA.
The case is not yet certified as a class action, nor has Plaintiff filed a Motion for Class
Certification. By previous order (Docket Entry No. 22), Plaintiff has been given until October 4,
2011, to file her Motion for Class Certification.
On December 9, 2010, Defendant served Plaintiff with an offer of judgment, pursuant to
Fed. R. Civ. P. 68, which Defendant alleges equals or exceeds Plaintiff’s maximum recovery
with respect to her individual claims.

It includes payment of $2,000.00 to Plaintiff, plus

reasonable costs including attorneys’ fees and expenses, in an amount to be determined by the
court. The offer of judgment was not accepted.
Thereafter, Defendant filed a motion to dismiss the action for lack of subject matter
jurisdiction (Docket Entry No. 17), and following full briefing on the motion, the court denied
the motion to dismiss in a Memorandum and Order entered on April 15, 2011. (Docket Entry
Nos. 28 & 29).

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Unless otherwise noted, the facts and allegations are drawn from the parties’ submissions and
Plaintiff’s Amended Complaint (Docket Entry No. 4).
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On April 26, 2011, Defendant filed a motion to clarify and to alter or amend the court’s
April 15, 2011 opinion. (Docket Entry No. 30). The motion was denied. (Docket Entry No. 31).
Defendant now seeks permission from the court to bring an interlocutory appeal to the
Sixth Circuit Court of Appeals on subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1).
ANALYSIS
Defendant seeks an interlocutory appeal under 28 U.S.C. § 1292(b)3 on the issue of
whether Defendant’s Offer of Judgment completely satisfies Plaintiff’s individual claims,
requiring dismissal for lack of jurisdiction under Fed. R. Civ. P. 12(b)(1), in an uncertified,
putative class action where there is no pending motion for class certification. The final order
was entered as to this issue on April 15, 2011.

The Sixth Circuit has jurisdiction over

interlocutory appeals from final orders of the district court pursuant to 28 U.S.C. § 1291.
Huckaby v. Priest, 636 F.3d 211 (6th Cir. 2011). Interlocutory appeals may be granted when
there is substantial ground for differing opinions regarding a controlling issue of law and when
an immediate appeal from the order would materially advance the ultimate termination of the
litigation. 28 U.S.C. § 1292(b). Nevertheless, certification under Section 1292(b) is to be
“sparingly” applied. In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002).
Section 1292(b) applies to interlocutory orders that are not otherwise appealable and
requires the existence of three elements: (1) the issue must involve a controlling question of law,

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Section 1292(b) states: “[w]hen a district judge, in making in a civil action an order not
otherwise appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference of opinion and
that an immediate appeal from the order may materially advance the ultimate termination of the
litigation, he shall so state in writing in such order.”
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(2) there must be a substantial ground for difference of opinion about the issue, and (3) an
immediate appeal must materially advance the ultimate termination of the litigation. Id. An
“interlocutory appeal is favored where reversal would substantially alter the course of the district
court proceedings or relieve the parties of significant burdens.” Gaylord Ent’mt Co. v. Gilmore
Ent’mt Group, 187 F. Supp. 2d 926, 957 (M.D. Tenn. 2001).

After reviewing the briefs

submitted by the parties and the record in this case, the court is of the opinion that this issue
qualifies for interlocutory review under Section 1292(b).
First, the issue involves a controlling question of law, that is, one that “could materially
affect the outcome of the case.” City of Memphis, 293 F.3d at 351. Whether a putative class
representative’s claim is mooted by a Rule 68 offer of judgment so as to defeat federal subject
matter jurisdiction is a controlling question of law. If it is determined by the Sixth Circuit that a
Rule 68 offer of judgment satisfying a plaintiff’s claim (proffered prior to a motion for class
certification and unaccepted by a plaintiff) renders a claim moot, this court would no longer
retain jurisdiction and the case should be dismissed. If, however, the contrary holds true, a
representative plaintiff would be allowed to proceed accordingly with class certification.
Certainly, the resolution of this legal issue “could materially affect the outcome” of this
litigation.
Second, there is a substantial ground for difference of opinion on this issue. A substantial
ground for difference of opinion may exist where the Sixth Circuit “has not rendered a decision
on the matter,” and the relevant authorities are “susceptible to competing interpretations.” West
Tenn. Chapter of Assoc. Builders and Contractors, Inc. v. City of Memphis, 138 F. Supp. 2d
1015, 1026 (W.D. Tenn. 2000). There appears to be no controlling Sixth Circuit precedent on

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this precise issue.4 Further, there is a substantial ground for difference of opinion on this matter.
As Defendant repeatedly cites in support of its proposition, several courts have concluded a
plaintiff cannot avoid mootness by merely rejecting a Rule 68 offer of judgment providing all the
relief to which it is entitled. Lomas v. Emergency Medical Billing, 2008 U.S. DIST. LEXIS
65480 (D. Utah 2008); Abrams v. Interco, 719 F.2d 23, 26 & 32-40 (2nd Cir. 1983); Zimmerman
v. Bell, 800 F.2d 386, 388 & 390 (4th Circ. 1986). (Docket Entry Nos. 18 at 4 and 33 at 4).

In

such instances, the proper remedy is to grant a Fed. R. Civ. P. 12(b)(1) motion to dismiss. Id.
In contrast, Plaintiff has directed the court to Beaudry v. Telecheck Services, Inc., 3:07cv-0842, wherein Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004), is discussed at length.
(Docket Entry No. 34 at 5). Weiss is similar to the present case in that the Rule 68 offer of
judgment was made prior to the plaintiff moving for class certification. Id. at 339. The Weiss
court was troubled with a class action defendant’s ability to essentially “pick off” named
plaintiffs by mooting their private individual claims through a tendered judgment before an
affirmative ruling on class certification could be obtained. Id. at 343 (citing Bank v. Roper, 445
U.S. at 339). Consequently, there is a substantial ground for difference of opinion here among
the courts.
Finally, an immediate appeal would materially advance the ultimate termination of the
litigation. An interlocutory appeal materially advances the ultimate termination of the litigation
when it “save[s] judicial resources and litigant expense.” West Tenn. Chapter of Assoc. Builders,

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Although throughout their briefs the parties reference Carroll v. United Compucred
Collections, Inc., 399 F.3d 620 (6th Cir. 2005), Carroll is dissimilar to the present case in that a
motion for class certification was pending and a Rule 68 offer of judgment was made not only to
the Carrolls, but also to the putative class. Another distinguishing factor is that the defendant
moved to dismiss the claim as moot prior to the offer being accepted.
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138 F. Supp. 2d at 1026. If it is determined by the Sixth Circuit that a Rule 68 offer of judgment
satisfying a plaintiff’s claim (proffered prior to a motion for class certification and unaccepted by
a plaintiff) renders a claim moot, the court would no longer retain jurisdiction and therefore
dismiss the claim– wherein no more costs would be expended by either party. The standard is
satisfied here, and, therefore, the court will certify the issue of whether Defendant’s Offer of
Judgment completely satisfies Plaintiff’s individual claims, requiring dismissal for lack of
jurisdiction, in an uncertified, putative class action where there is no pending motion for class
certification.
CONCLUSION
For the reasons discussed herein, Defendant’s motion will be granted and certified for
interlocutory appeal on the issue of whether Defendant’s Fed. R. Civ. P. 68 Offer of Judgment
completely satisfies Plaintiff’s individual claims, requiring dismissal for lack of jurisdiction
under Fed. R. Civ. P. 12(b)(1), in an uncertified, putative class action where there is no pending
motion for class certification.
An appropriate order will enter.

____________________________________
KEVIN H. SHARP
UNITED STATES DISTRICT JUDGE

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