Chatman v. GC Services, LP

302 F.R.D. 136, 2014 WL 3474231, 2014 U.S. Dist. LEXIS 98226

• Court: District Court, D. South Carolina
• Decided: July 16, 2014
• Docket: Civil Action No. 3:14-cv-00526-CMC
• Status: Published

Opinion

ORDER DENYING MOTION TO DISMISS

CAMERON McGOWAN CURRIE, Senior District Judge.

This matter is before the court on Defendant’s motion to dismiss for lack of subject matter jurisdiction. ECF No. 28. Defendant argues that Plaintiff lost standing to proceed with this putative class action following Defendant’s offer of judgment of the maximum relief Plaintiff could have received for her individual claims. For the reasons set forth below, the motion is denied.

BACKGROUND

Complaint. Plaintiff asserts two claims under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Both claims relate to two very similar voice messages left on Plaintiff’s cellular telephone, the earlier of which was as follows: “This message is intended for Kim Chatman. My name is Olivia [last name inaudible]. It is important for you to return my call. My number is 866-862-2789.” ECF No. 1 ¶¶ 11, 12. Plaintiff alleges that the calls violated 15 U.S.C. § 1692d(6) because the calls were made “without meaningfully disclosing the caller’s identity.” ECF No. 1 ¶ 56 (first claim). She also alleges that the calls violated 15 U.S.C. § 1692e(11) because the caller failed “to notify Plaintiff during each collection contact that the communication was from a debt collector.” Id. ¶ 58.

In addition to seeking relief on her own behalf, Plaintiff seeks to represent a class defined as follows:

All persons (1) located in South Carolina, (2) for whom Defendant left, or caused to be left, a voice message, (3) in connection with collection of a consumer debt, (4) within the year preceding this complaint, (3) that failed to state its name, and/or failed to state the nature of its business, and/or failed to disclose that it was a debt collector, and/or failed disclose that the purpose of its calls was to collect a debt.

ECF No. 1 ¶ 28. Plaintiff seeks relief including a declaration that Defendant violated 15 U.S.C. § 1692d(6) and 15 U.S.C. 1692e(ll), statutory damages, and attorneys’ fees and costs. Id. ¶ 59(d), (e).

Motion for Class Certification. Plaintiff filed a motion for class certification concurrently with her Complaint. ECF No. 5. She also filed a .motion to stay briefing of the motion for class certification. ECF No. 6. The motion to stay was granted, leaving the motion for class certification pending without briefing for some period of time. ECF No. 7; see also ECF No. 27 (modifying the briefing deadlines in light of the court’s denial of Plaintiffs motion to strike and the parties’ responses to Local Civil Rule 26.03 interrogatories).

Offer of Judgment. Defendant served Plaintiff with an offer of judgment approximately two weeks after Defendant was served with the Complaint. See ECF No. 16 at 1 (motion to strike offer of judgment). Plaintiff did not accept the offer.¹

Motion to Strike. Plaintiff moved to strike the offer of judgment or, in the alternative, to render it ineffective. ECF No. 16. This motion was denied by order entered May 28, 2014. ECF No. 26. The court relied on the absence of filing in denying the motion to strike. Id. at 26 at 1. The court declined to address effectiveness of the offer of judgment because the request to do so sought an advisory opinion. Id. at 2. The court, nonetheless, noted certain language in the majority opinion in Genesis Healthcare Corp. v. Symczyk, 569 U.S.-, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013), favored Defendant’s position that the offer was not ineffective, while strong language in the dissent favored Plaintiff on a point not addressed by the majority. ECF No. 26 at 2-4.

DISCUSSION

For purposes of this order, the court assumes without deciding that Defendant’s offer of judgment affords Plaintiff complete relief to the extent the claims are pursued in her individual capacity. The court further assumes that, under binding Fourth Circuit authority, the unaccepted offer of judgment would preclude Plaintiff from proceeding were her claims pursued solely in her individual capacity. See, e.g., Warren v. Sessoms & Rogers, P.A., 676 F.3d 365 (4th Cir.2012).² This leaves the critical question whether the presence of class allegations in the Complaint and the pendency of a motion for class certification (filed with the Complaint) preclude the offer of judgment from rendering Plaintiffs action moot.

Neither party cites to any Fourth Circuit or United States Supreme Court authority on this precise issue. Plaintiff does, however, direct the court to decisions from the Third, Ninth, and Tenth Circuits, each of which holds that a defendant may not moot a putative class action simply by tendering complete individual relief to the named Plaintiff, even before a motion for class certification is filed. ECF No. 29 at 2 (citing Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1091-92 (9th Cir.2011); Lucero v. Bureau of Collection Recovery, Inc., 639 F.3d 1239, 1249-50 (10th Cir.2011); Weiss v. Regal Collections, 385 F.3d 337, 348 (3d Cir.2004)). Plaintiff also directs the court to decisions from the Fifth, Sixth, and Seventh Circuits that reach a similar result when a motion for class certification is pending at the time the offer is made. Id. (citing Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir.2011); Carroll v. United Compucred Collections, Inc., 399 F.3d 620 (6th Cir.2005); Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1051 (5th Cir.1981)).³

Plaintiff notes that Defendant has not cited “a single holding that states otherwise.” ECF No. 29. Defendant does not challenge this assertion on reply. Instead, Defendant concedes that Plaintiff “cites numerous cases to support her contention that her claims cannot be rendered moot after she moved to certify a class,” but argues that the cases on which Plaintiff relies should be disregarded because all “pre-date the Genesis opinion or are non-binding on this Court.” ECF No. 32.

As Defendant argues and as noted in the order denying Plaintiffs motion to strike, there is language in the majority opinion in Genesis that could support Defendant’s position, but only if the reasoning was extended from collective actions under the Fair Labor Standards Act (“FLSA”) to class actions under Rule 23 of the Federal Rules of Civil Procedure. The Genesis majority was, however, careful to distinguish Rule 23 class actions from FLSA collective actions. The majority also assumed without deciding that the named plaintiffs claims were mooted by the underlying offer of judgment (a presumption that prompted a strongly worded dissent). See supra n. 2. These factors weigh against extension of the Genesis rationale to abrogate the rule adopted by at least six circuits (and contradicted by none): that an offer of judgment of complete individual relief to the named plaintiff may not moot a class action, at least where a motion for class certification is pending at the time the offer is made. Lacking any contrary circuit court decision or guidance from the Fourth Circuit, this court finds that an offer of judgment will not moot a named plaintiffs claim if the offer is made while a motion to certify the class is pending.⁴

In this case, Plaintiff filed her motion for class certification concurrently with her complaint. The motion for class certification was, therefore, pending at the time the offer of judgment was made. This court finds these facts sufficient to preclude mootness based on the offer of judgment.⁵

IT IS SO ORDERED.

1 . The offer of judgment was not accepted and has never been filed. Id. n. 1 (noting Plaintiff was not filing the offer of judgment, even as an exhibit to the motion to strike).

2 . As noted in this court’s earlier order denying Plaintiff's motion to strike, ECF No. 26 at 3 n. 3, the rule the Fourth Circuit follows with regard to unaccepted offers of judgment was criticized by the dissent in Genesis, on a point which was not addressed by the majority. Genesis, 133 S.Ct. at 1534 (“a friendly suggestion to the [courts below]: Re-think your mootness-by-unaccepted-of-fer theory. And a note to all other courts of appeals: Don’t try this at home.”). Regardless of the vigor of the dissent, it does not change the rule in Warren.

3 . In Damasco, the court found the action was mooted by an offer of complete relief made before plaintiff moved for class certification. The court rejected plaintiff's argument that this presented a "buy-off problem” because there was a "simple solution”: "Class-action plaintiffs can move to certify the class at the same time that they file their complaint. The pendency of that motion protects a putative class from attempts to buy off the named plaintiffs.” Id. at 896; see also id. at 895 (noting the Seventh Circuit had "long held that a defendant cannot moot a case by making an offer after a plaintiff moves to certify a class”) (emphasis in original).

4 . In Kensington Physical Therapy, Inc. v. Jackson Therapy Partners, LLC, 880 F.Supp.2d 689 (D.Md.2012), the court held an offer of complete individual relief ineffective to moot the named plaintiff’s claims in a putative class action based on the presence of class allegations in the complaint (before a motion for class certification was filed). The court reaffirmed this decision after consideration of Genesis. Kensington Physical Therapy, Inc. v. Jackson Therapy Partners, LLC, 974 F.Supp.2d 856 (D.Md.2013) (also declining to certify the issue for interlocutory appeal).

5 . Given the facts of this case, the court need not decide whether the presence of class allegations in the complaint is sufficient to preclude mootness based on an offer of judgment.