Ung v. Universal Acceptance Corp.

190 F. Supp. 3d 855, 94 Fed. R. Serv. 3d 1904, 2016 U.S. Dist. LEXIS 72861, 2016 WL 3136858
CourtDistrict Court, D. Minnesota
DecidedJune 3, 2016
DocketCiv. No. 15-127 (RHK/FLN)
StatusPublished
Cited by4 cases

This text of 190 F. Supp. 3d 855 (Ung v. Universal Acceptance Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ung v. Universal Acceptance Corp., 190 F. Supp. 3d 855, 94 Fed. R. Serv. 3d 1904, 2016 U.S. Dist. LEXIS 72861, 2016 WL 3136858 (mnd 2016).

Opinion

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, United States District Judge

In this putative class-action, Plaintiff Spencer Ung alleges that Defendant Universal Acceptance Corporation (“Universal”) made unauthorized calls to his cell phone, in violation of the Telephone Consumer Protection Act, (TCPA), 47 U.S.C. § 227 et seq, Based on a settlement offer made in March 2016, Universal now argues Ung’s claims are moot, and it moves for the entry of judgment. For the reasons that follow, the Court will deny the Motion.

BACKGROUND

The Complaint alleges that beginning in June 2014, Universal repeatedly called Ung’s cell phone in an attempt to reach an individual named Joseph Holly, “for whom[ ] Mr. Ung was apparently listed as a credit reference.” (Compl. ¶ 16.) Ung had no prior relationship with Universal and had never consented to be contacted on his cell phone by the company. (Id, ¶ 15.) He repeatedly told Universal to stop calling him, but the calls continued unabated, including from an automated telephone dialing system.

Ung sued in January 2015. His two-count Complaint alleges that Universal negligently (Count I) and willfully (Count II) violated the TCPA by calling his.cell phone using an autodialer without his consent. He seeks statutory damages of up to $1,500 per call and an injunction “requiring [Universal] to cease all communications in violation of the TCPA.” In addition, Ung purports to act on behalf of all similarly situated persons called on their cell phones with an autodialer by Universal. On July 13, 2015, Magistrate Judge Keyes issued a Scheduling Order that, among other things, set March 1, 2016, as the deadline for Ung to move for class certification.

The parties then engaged in discovery for much of a year. Because of delays in receiving information regarding the putative class, Ung requested and was granted an extension to April 1, 2016, to move for class certification. Shortly before Ung filed such a motion, however, Universal attempted to moot this case. Specifically, on March 21, 2016, it “hand-delivered to [Ung’s] counsel a certified check in the amount of $18,000 made payable to plaintiff and his counsel, along with a letter providing an offer” to stipulate to' an award of costs under Rule 54 and an injunction prohibiting future calls to Ung’s cell phone. (Def. Mem. at 2.) The $18,000, according to Universal, is the maximum amount of damages Ung could recover in this action on an individual basis, because it is (allegedly) undisputed that (1) Ung seeks only statutory damages, (2) the largest amount of such damages recoverable under the TCPA is $1,500 per call, and (3) Universal called Ung 12 times (and 12 times $1,500 is $18,000). By letter dated March 25, 2016, Ung rejected the offer and returned the'$18,000 check to Universal’s counsel. One week later, he moved to certify a class, arguing that Universal called over 370,000 different cell phone numbers without consent.

Nevertheless, because Universal had tendered to Ung the maximum amount of damages he could arguably recover in this case, and because it also had offered a [857]*857stipulated injunction and an award of costs, Universal claims it has afforded Ung complete relief. Accordingly, it now moves for- the entry of judgment, asserting that this action is moot. The Court stayed further briefing on the class-certification Motion in order to address mootness. See Ali v. Cangemi, 419 F.3d 722, 724 (8th Cir. 2005) (en banc) (“If an issue is moot in the Article III sense, [the Court] ha[s] no discretion and must dismiss the action for lack of jurisdiction.”). Having been fully briefed, that issue is now ripe for disposition.

ANALYSIS

Universal largely predicates its argument on the Supreme Court’s recent decision in Campbell-Ewald Co. v. Gomez, — U.S.-, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). A full understanding of Campbell-Ewald requires some discussion of the legal landscape leading up to it.

I. Cases, controversies, and Rule 68 offers

Article III, Section 2 of the Constitution limits the jurisdiction of federal courts to “cases” and “controversies.” The Supreme Court has held that this requires an “actual controversy [to] be extant at all stages of review, not merely at the time the complaint is filed,” Arizonans for Official English v. Arizona, 520 U.S. 43, 67, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997) (internal quotation marks and citations omitted). Hence, if circumstances change once an action has been commenced and the plaintiff loses his “personal stake in the outcome of the lawsuit,” the case is moot and must be dismissed. Lewis v. Continental Bank Corp., 494 U.S. 472, 477-78, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990).

Defendants — particularly class-action defendants — often raise mootness in connection with offers of judgment under Federal Rule of Civil Procedure 68. See, e,g., Johnson v. U.S. Bank Natl Ass’n, 276 F.R.D. 330, 333 (D.Minn.2011) (Keyes, M.J.). A common tactic for a defendant facing a putative class action is to offer complete relief to the named plaintiff on his individual claim, typically for a small sum. Id. Even when unaccepted, such an offer- raises the specter of mootness because some .courts have held that “a[n] ... offer that provides complete relief to the plaintiff renders the plaintiffs claims moot, even if the plaintiff refuses the offer.” Harris v. Messerli & Kramer, P.A., Civ. No. 06-4961, 2008 WL 508923, at *2 (D.Minn. Jan, 2, 2008).(Schutz, J.) (collecting cases); accord, e.g., Greisz v. Household Bank (Illinois), N.A., 176 F.3d 1012, 1015 (7th Cir. 1999) (“You cannot persist in suing after you’ve won.”). And by “picking off’ the named plaintiff in this fashion and mooting his individual claim, an entire putative class action may in fact be rendered moot. See, e.g„ Holstein v. City of Chicago, 29 F.3d 1145, 1147-48 (7th Cir.1994) (defendant’s offer of refund mooted plaintiffs claim and required dismissal of putative class action); Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1045 (5th Cir. 1981) (“[A] suit brought as a class action must as a general rule be dismissed as moot when the personal claims for the named plaintiffs are satisfied, and no class has properly been certified.”); Krzykwa v. Phusion Projects, LLC, 920 F.Supp.2d 1279, 1282-83 (S,D.Fla.2012); Jones v. CBE Grp., Inc., 215 F.R.D. 558 (D.Minn. 2003) (Doty, J.).1

[858]*858Not surprisingly, mooting a class action in this fashion caused some consternation among courts. As Judge Posner noted in Primax Recoveries, Inc, v. Sevilla, 324 F.3d 544

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190 F. Supp. 3d 855, 94 Fed. R. Serv. 3d 1904, 2016 U.S. Dist. LEXIS 72861, 2016 WL 3136858, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ung-v-universal-acceptance-corp-mnd-2016.