Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—W.D. Tex.: Offer of judgment did not moot consumer’s TCPA claim, (Feb 12, 2015)

By Greg Hammond, J.D.

Specialty Graphics, Inc. was not entitled to dismissal of a consumer’s Telephone Consumer Protection Act (TCPA) claim for ten calls allegedly made to him via an automated telephone dialing system. The federal district court in Austin determined that an offer of judgment filed ten days before a motion to certify class did not moot the TCPA claim (Suttles v. Specialty Graphics, Inc., February 11, 2015, Austin, A.).

Background. Consumer John Colin Suttles filed a putative class action against Specialty Graphics, asserting that the company contacted him on his cellular telephone number through an automated telephone dialing system on ten separate occasions. Suttles seeks an injunction, requiring Specialty Graphics to cease all wireless spam activities, along with statutory damages to the class members, treble damages, and reasonable attorney fees and costs.

Specialty Graphics filed an answer and a Federal Rule of Civil Procedure 68 offer of judgment to Suttles, allegedly offering the maximum amount Suttles could recover for his claims—$15,000, or $1,500 per call for ten calls, which is comprised of the statutory fine and treble damages. In addition, Specialty Graphics offered to pay reasonable attorney fees and costs, and agreed to cease any further telephone calls to Suttles in the future. Suttles did not accept the offer of judgment. Instead, Suttles moved for class certification and moved to strike Specialty Graphics’ offer of judgment. Conversely, Specialty Graphics moved to dismiss.

Offer of judgment. In support of its motion to dismiss, Specialty Graphics argued that Suttles’ claims were mooted by its offer of judgment, and the court therefore lacked subject matter jurisdiction. Under Rule 68, an offer of judgment that fully satisfies a plaintiff’s claim moots that claim. Consequently, the issue in this case, according to the court, was whether Specialty Graphics’ offer of judgment to Suttles moots both his individual claims and his claims brought on behalf of the putative class.

Specialty Graphics cited the U.S. Supreme Court’s decision in Genesis Healthcare Corp. v. Symczyk (133 S.Ct. 1523 (2013)), arguing that Genesis mandates that the court dismiss the case as moot. The district court rejected Specialty Graphics’ argument, noting that the Court specifically limited its holding in Genesis to Fair Labor Standards Act of 1938 collective action cases.

The court further noted that the Fifth Circuit has issued conflicting opinions on the issue in this case. In Mabary v. Home Town Bank (771 F.3d 820 (5th Cir. 2014)), the appellate court held that a Rule 68 offer of judgment made prior to a class certification motion was filed did not moot the case, and the case was subject to the relation back doctrine. However, two weeks ago, the Fifth Circuit released a decision “casting doubt” on the relation back doctrine in light of Genesis. Finding that the two Fifth Circuit decisions could not be reconciled, the court determined that it should follow the earliest decided case—Mabary—which squarely concluded the a class certification motion filed four days after the receipt of an offer of judgment is sufficiently timely and diligent to prevent the claim from being mooted by the offer of complete relief to the individual plaintiff.

In the instant case, the offer of judgment and motion to certify a class were filed 10 days apart. The court found it difficult to see how Suttles could have been more diligent or prompt with his class certification motion, because Specialty Graphics had filed its answer with the offer of judgment. Consequently, the motion to certify related back to filing of the original complaint, and the offer of judgment did not moot Suttles’ individual or class complaint.

Motion to strike. Suttles motion to strike was denied for two reasons: (1) under Rule 68, Specialty Graphics’ unaccepted offer of judgment was deemed withdrawn; and (2) Under Rule 12(f), courts are only allowed to strike pleadings, and an offer of judgment is not considered a pleading.

Differing views. In a similar TCPA action, the federal district court in Central Islip, New York granted summary judgment to a defendant for lack of jurisdiction of TCPA claims filed by a fax recipient, based on an offer of judgment made to the named plaintiff. The plaintiff filed a second motion for class certification nearly two weeks after the defendant served an individual offer of judgment. The court determined that the plaintiff no longer had an interest in the suit, and no longer had a continuing interest in obtaining relief for the putative class.

The case number is A-14-CA-505 RP.

Attorneys: Brian B. Kilpatrick (Hughes Ellzey LLP) for John Colin Suttles. E.G. Morris (Law Office of E.G. Morris), and Kellie J. Mitchell (Copilevitz & Canter LLC) for Specialty Graphics, Inc.

Companies: Specialty Graphics, Inc.

Cases: ConsumerProtection TexasNews