Abramov v. I.C. System, Inc.

65 F. Supp. 3d 323, 2014 U.S. Dist. LEXIS 172814, 2014 WL 7009712
District Court, E.D. New York·Decided December 12, 2014·No. No. 14-cv-4000 (ADS)(ARL)·Published·Cited by 3 cases

Opinion

DECISION AND ORDER

SPATT, District Judge.

Familiarity with the factual and procedural history of this case is presumed.

By way of background, on July 1, 2014, the Plaintiff Elman Abramov (the “Plaintiff’) brought this class action lawsuit on behalf of himself and a proposed nationwide class seeking redress for certain actions taken by the Defendants I.C. System, Inc. (“I.C. System”) and John Does 1-25 (collectively the “Defendants”) allegedly in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the “FDCPA”).

Of relevance here, the FDCPA authorizes courts to award individuals “any actual damage” sustained because of a violation of its provisions and “additional damages not exceeding $1,000.” 15 § 1692k(a)(l)-2(A). The FDCPA further authorizes class damages up to the smaller of $500,000 or 1% of the defendant’s value. 15 § 1692k(a)(2)(B). In either individual or class actions, plaintiffs may also recover attorneys’ fees and costs. 15 § 1692k(a)(3). Here, the Plaintiff seeks both actual and statutory damages on behalf himself and the class.

On August 19, 2014, I.C. System moved pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief can be granted.

On August 28, 2014, I.C. System served the Plaintiff with a Rule 68 Offer of Judg- ' ment, which provided as follows:

Pursuant to Fed.R.Civ.P. 68, defendant I.C. System, Inc. hereby offers to allow judgment to be taken against it in this action as to the individual Fair Debt Collection Practices Act (“FDCPA”) claim of plaintiff Elman Abramov in the amount of (a) One Thousand Five Hundred and One Dollars ($1,501.00) payable to Elman Abramov plus (b) reasonable attorney’s fees and costs to be determined by the Court, payable to Elman Abramov for the benefit of all attorneys in this matter, including counsel of record. Any judgment entered pursuant to this offer will be in full satisfaction of the. plaintiffs individual claims under the FDCPA for damages, costs, and attorney’s fees in this action. See Compl...[Dkt. # 1], ¶¶3947.
If this Offer of Judgment is not accepted in writing within fourteen (14) days after its services, it shall be deemed withdrawn.

(The Pi’s Exh. B.)

That day, the Plaintiffs counsel e-mailed I.C. Systdm’s counsel advising that “said Offer is improper at this time and therefore Plaintiff can neither accept nor reject said Offer.” (Pi’s Exh. C.) The Plaintiff also contended that an Offer of Judgment could not moot a putative class action absent undue delay in the filing of a motion for class certification.

On October 14, 2014, 54 F.Supp.3d 270, 2014 WL 5147549 (E.D.N.Y.2014), this Court granted in part and denied in part I.C. System’s motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).

On October 28, 2014, I.C. System moved pursuant to Fed.R.Civ.P. 12(b)(1) to dismiss the class action complaint for lack of subject matter jurisdiction or, in the alternative, for a stay of this action pending resolution of two cases pending before the Second Circuit, Franco v. Allied Interstate, LLC, Docket No. 14-1464 and Tanasi v. New Alliance Bank, Docket No. 14-1389.

[325]*325. In support of its motion, I.C. Systems contends that the Plaintiff has failed to sufficiently allege “actual damages.” Re-latedly, I.C. System asserts that the Rule 68 Offer of Judgment in the amount of $1,501, plus reasonable attorneys’ fees and costs, provided full relief to the Plaintiff and exceeded the amount of statutory damages, costs, and attorneys’ fees that the Plaintiff would be entitled to were he successful on his FDCPA claims. Relying on Doyle v. Midland Credit Mgmt. Inc., 722 F.3d 78 (2d Cir.2013), I.C. System maintains that the Plaintiffs failure to accept the Rule 68 Offer of Judgment renders his claims moot. Further, relying on Franco v. Allied Interstate LLC, 13 CIV. 4053(KBF), 2014 WL 1329168 (S.D.N.Y. Apr. 2, 2014), I.C. System maintains that the putative class action must be dismissed as well for lack of subject matter jurisdiction.

The Plaintiff counters that the instant motion is a procedurally defective “successive motion.” Further, relying on this Court’s FDCPA decision in Thomas v. American Service Finance Corporation, 966 F.Supp.2d 82 (E.D.N.Y.2013), the Plaintiff contends that the Rule 68 Offer of Judgment does not moot his individual claims because the offer was “premature,” meaning made before the Plaintiff “had a reasonable opportunity within which to move for class certification.” Id. at 93. To hold otherwise, the Plaintiff argues, would encourage “a race to the courthouse between defendants armed with uninformed offers and plaintiffs with under-researched certification motions.” Id. (quoting McDowall v. Cogan, 216 F.R.D. 46, 51 (E.D.N.Y.2003)). The Plaintiff also argues that the Rule 68 Offer does not deprive this Court of subject matter jurisdiction because the Plaintiff retains the ability to recover “actual damages.”

As an initial matter, the Court easily disposes of the Plaintiffs argument that the instant motion is a procedurally defective “successive motion.” Rule 12(g)(2) provides that “a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” However, Rule 12(g)(2) explicitly incorporates as an exception Rule 12(h)(3), which permits the Court to consider the defense of lack of subject matter jurisdiction at any time. This is so because courts have an independent obligation to examine its subject-matter jurisdiction at all successive stages of litigation. See Thompson v. County of Franklin, 15 F.3d 245, 248 (2d Cir.1994). Thus, the instant motion to dismiss on the basis of subject matter jurisdiction is proper.

Further, even if a defense of lack of subject matter jurisdiction could not be considered at any time, the Court notes that the instant motion would still not violate Rule 12(g)(2)’s prohibition against successive motions. This is because the Rule 68 Offer of Judgment was served on the Plaintiff after the filing of the initial motion to dismiss and, therefore, this defense of lack of subject matter jurisdiction was not available to the I.C. System at the time of the initial motion to dismiss.

Nevertheless, the Court denies the motion to dismiss for lack of subject matter jurisdiction. Indeed, the Court need not address the question whether, in a Rule 23 class action lawsuit, a defendant’s Rule 68 offer of judgment to the named plaintiff only, made before a class certification motion is filed, moots both the individual and class claims.

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Abramov v. I.C. System, Inc., 65 F. Supp. 3d 323, 2014 U.S. Dist. LEXIS 172814, 2014 WL 7009712 (E.D.N.Y. 2014).

65 F. Supp. 3d 323 (Abramov v. I.C. System, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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