Antitrust Law Daily Wrap Up, PRIVACY—N.D. Ill.: Offer of judgment rendered TCPA claim moot, (Jul 18, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by a consumer against a sourcing marketplace for manufacturers for sending two unsolicited advertisements in violation of the Telephone Consumer Protection Act (TCPA), the defendant’s offer of judgment that satisfied the plaintiff’s entire demand rendered his claim moot, the federal district court in Chicago has decided. The court also denied the plaintiff leave to file an amended complaint (Chapman v. First Index, Inc., July 16, 2014, Ellis, S.).

First Index, Inc. provided online sourcing and marketplace services to manufacturers. Arnold Chapman, filed a putative class action suit against First Index, alleging that the marketer violated the TCPA by sending him two unsolicited advertisement to his facsimile machine. Chapman’s motion for class certification was denied in March 2014. While the motion for class certification was pending, First Index made a collective settlement offer and offer of judgment under Rule 68 of the Federal Rule of Civil Procedure. Subsequently, Chapman sought to file an amended complaint with a new class definition. First Index moved for dismissal in accordance with its Rule 68 offer of judgment.

Motion to dismiss. After Chapman’s motion for class certification was denied, only his individual claims remained at issue. By its terms, First Index’s offer was structured as both a settlement offer and Rule 68 offer of judgment, and the offer remained open for fourteen days after the court ruled on Chapman’s class certification motion, according to the court. As such, the settlement offer had the same effect as a Rule 68 offer of judgment as long as provided the plaintiff with complete relief.

There was no dispute that First Index’s offer provided Chapman with complete relief of his individual claims and the monetary amount offered was above the maximum amount Chapman could recover for the receipt of two unsolicited faxes under the TCPA damages provision. First Index also agreed to injunctive relief as well as payment of reasonable costs. Because only his individual claims were pending at the time the offer was open, First Index’s offer operated to moot Chapman’s individual claims, the court determined.

Amended complaint. In denying his motion to file an amended complaint, the court found that Chapman unduly delayed in seeking to amend the class definition. The merit of his new theory of liability – a noncompliant opt-out notice – was not newly discovered as the relevant applicable regulations were implemented in 2006. Moreover, the case had been ongoing for over four years and Chapman had several opportunities to amend the class definition prior to the closure of discovery. Furthermore, Chapman’s attempt to avoid the court’s class certification decision by changing his theory of liability was inappropriate, the court noted.

The case is No. 09 C 5555.

Attorneys: Brian J. Wanca (Anderson & Wanca) for Arnold Chapman. Albert M Bower (SmithAmundsen LLC) for First Index, Inc.

Companies: First Index, Inc.

Cases: Privacy IllinoisNews