Courts Reject Attempts to Pick Off Named Plaintiffs Via Offers Of Judgment

Following the Supreme Court’s 2012 recognition of concurrent federal and state jurisdiction over Telephone Consumer Protection Act (“TCPA”) class actions in Mims v. Arrow Financial Services, federal courts have issued numerous decisions addressing certification of TCPA classes that may be of broader interest to class action lawyers.  (By way of example, see our May 20, 2014 post: Ohio District Court Strikes Impermissible "Fail-Safe" Class Allegations.)

Two recent TCPA decisions address efforts to moot putative class claims via offers of judgment.  In Garrett v. New Albertson’s, Inc., plaintiff erroneously filed suit against Albertson’s LLC.  Before plaintiff revised its pleadings to name New Albertson’s as the proper defendant, New Albertson’s made plaintiff an offer of judgment.  When plaintiff amended the complaint,   New Albertson’s moved to dismiss.  Although the court acknowledged Seventh Circuit precedent recognizing that a defendant’s offer of judgment prior to a motion for class certification moots the action, it found the rule inapplicable where the entity making the offer had not yet been named as a defendant. The court reasoned that under such circumstances, plaintiff did not have an opportunity to protect itself from an individual “buy-off” attempt.

Kaye v. Amicus Mediation & Arbitration Group involved individual and more complex class claims (Classes A, B and C) regarding the alleged receipt of unsolicited faxes in violation of the TCPA.  The court noted conflicting authorities regarding whether offers of judgment apply to putative class actions, and, if so, the effect of such offers relative to the timing of class certification motions.  The court, however, found that it need not resolve these questions because the defendant’s offer of judgment did not satisfy plaintiffs’ maximum recovery.  Specifically, the TCPA provides statutory damages of $500 per violation, trebled to $1500 per violation in the case of intentional violations.  Defendant offered a judgment of $1,500 per violation for each of the seven faxes allegedly sent to plaintiffs.  Plaintiffs, however, argued that each fax violated multiple provisions of the TCPA, giving rise to multiple statutory damages awards for a single fax.  The court found plaintiffs’ argument plausible at this stage of the proceedings: “[w]hile defendants may well prevail in their view of the law, this dispute as to whether multiple statutory damages awards can be recovered for a single fax’s multiple TCPA violations goes to the merits of plaintiffs’ individual claims and the corresponding amount that would be necessary to satisfy these claims.”  In so holding, the court expressly declined to hear defendant’s argument that plaintiffs’ damages model violated due process and undermined superiority, finding that: “[f]or purposes of certification, the question is not the size of hypothetical damages” and that “there is no per se bar” to TCPA class actions.  The court certified Class A and the narrowly drawn Classes B and C.

Garrett v. New Albertson’s, Inc., No. 13 C 7965, slip op. (N.D. Ill. May 27, 2014)

Kaye v. Amicus Mediation & Arbitration Group, No. 3:13-CV-347 (JCH), slip op. (May 28, 2014)

 

Topics:  Class Action, Class Certification, Litigation Strategies, Offer of Judgment, TCPA

Published In: Civil Procedure Updates, Civil Remedies Updates, Communications & Media Updates, Consumer Protection Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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