On May 8, 2017, the United States District Court for the Southern District of New York issued a ruling rejecting Educational Testing Service’s (“ETS”) attempt to moot a class action brought pursuant to the Telephone Consumer Protection Act (“TCPA”) through an offer of judgment. The TCPA fax class action complaint alleges that ETS sent out over 17,000 unsolicited and solicited fax advertisements without including proper statutory opt-out language. The class representative received one fax advertisement from ETS which, as alleged by the plaintiff, violated the TCPA in six separate ways. Prior to the Court deciding the plaintiff’s motion for class certification, ETS sent the plaintiff a certified check for $10,000, which defendant believed was the maximum relief that the named plaintiff could obtain. Plaintiff’s counsel, however, rejected the payment, and stated that the maximum relief that the plaintiff could recover would be $10,500. Thereafter, ETS filed a motion with the Court, seeking to deposit $10,500 with the Court, and requesting that the Court enter judgement in favor of the plaintiff and against ETS, with injunctive relief, thus dismissing the entire TCPA fax class action. The Court painstakingly analyzed a morass of legal precedent in an attempt to answer whether or not ETS’s actions were significant enough to moot the named plaintiff’s claims and, thereby, warrant dismissal of the entire action. After a thorough analysis, the Court exercised its discretion and denied ETS’s motion.

Why Was ETS’s Offer of Judgment Insufficient to Defeat the TCPA Fax Class Action?

In arriving at its decision to deny ETS’s motion, the Court reviewed several Supreme Court and Second Circuit decisions. The Court relied heavily on a United States Supreme Court decision which considered whether it had appellate jurisdiction to review a lower court’s denial of class certification after the defendant at issue had tendered complete individual relief to the plaintiff following denial of class certification. In that case, the Supreme Court reasoned that it did possess such jurisdiction because the plaintiff still retained an “economic interest in class certification,” specifically, the “desire to shift part of the costs of litigation to those who will share in its benefits if the class is certified and ultimately prevails.”

Protect Yourself: Consult with a TCPA Attorney Today

Early last year, we blogged about the United States Supreme Court’s ruling that an unaccepted offer of judgment cannot nullify a purported class action. Since that decision, defendants in TCPA class action cases have attempted to rely on dicta and the dissent in that case to find ways to successfully moot a putative plaintiff’s claims. Although some attempts have been successful, courts throughout the country have largely held that unaccepted offers of judgment cannot defeat a class action lawsuit.