Reversing dismissal and reinstating a Telephone Consumer Protection Act suit, the Eleventh U.S. Circuit Court of Appeals ruled that unaccepted offers of judgment to the named plaintiffs – but not to class members – did not render the case at hand moot.
Jeffrey Stein and five other plaintiffs filed a putative class action suit against the Buccaneers Limited Partnership (BLP), the corporate entity behind the National Football League’s Tampa Bay Buccaneers. The complaint alleged that BLP sent unsolicited faxes advertising tickets to Buccaneers games to more than 100,000 recipients, in violation of the TCPA.
The plaintiffs demanded statutory damages of $500 per violation, trebled to $1,500 based on BLP’s willfulness, as well as an injunction against future statutory violations. Process was served on BLP on August 1, 2013. On August 16, BLP removed the suit to federal court. Three days later, BLP served each of the six named plaintiffs an offer of judgment pursuant to Federal Rule of Civil Procedure 68.
Among other terms, the offer was “intended to fully satisfy the individual claims” of each plaintiff, but was “not to be construed as either” an admission of liability by BLP or that the plaintiff “has suffered any damage.” Further, the terms of the offer prohibited plaintiffs from filing it with the Court unless it was accepted or filed in a proceeding to determine costs.
The offers were identical except for the proposed dollar amounts, which varied based on the number of faxes allegedly received by the plaintiffs, ranging from $1,500 to $7,500. None of the plaintiffs accepted the offers, which were deemed rejected after the Rule’s proscribed 14-day period.
BLP then moved to dismiss the lawsuit for lack of jurisdiction, asserting that the unaccepted offers rendered the case moot. Although the plaintiffs moved to certify a class, the court denied their motion to certify and, in a later order after the deadline to accept the offers, dismissed the case as moot, which prompted the plaintiffs’ appeal.
Addressing an issue of first impression in the circuit, a unanimous panel of the Eleventh Circuit held first that an individual plaintiff’s claim does not become moot when the plaintiff does not accept a Rule 68 offer of judgment that, if accepted, would have provided all the relief the plaintiff sought.
Secondly, the court said that even if such offers are made to all the named plaintiffs in a proposed class action before they move to certify a class, the named plaintiffs may nonetheless go forward as class representatives.
The panel explained that Rule 68 is designed to require a party who rejects an offer, litigates, and does not get a better result, to pay the other side’s costs. “Giving controlling effect to an unaccepted Rule 68 offer – dismissing a case based on an unaccepted offer as was done here – is flatly inconsistent with the rule,” the court said. “When the deadline for accepting these offers passed, they were ‘considered withdrawn’ and were ‘not admissible,’” pursuant to Rule 68(b).
As a result, “the plaintiffs still had their claims, and BLP still had its defenses,” the court added. “BLP had not paid the plaintiffs, was not obligated to pay the plaintiffs, and had not been enjoined from sending out more faxes. The named plaintiffs’ individual claims were not moot.”
The Eleventh Circuit cited a four-justice opinion from the U.S. Supreme Court that adopted a similar position in the context of a 2013 Fair Labor Standards Collective Action decision. In that case, Genesis Healthcare Corp. v. Symczyk, the majority accepted the parties’ stipulation that the defendant’s offer of judgment mooted the plaintiff’s individual claims.
But the dissent wrote that the “thrice-asserted view [that the defendant’s offer mooted the plaintiff’s individual claims] is wrong, wrong, wrong,” later adding “So a friendly suggestion to the Third Circuit: Rethink your mootness-by-unaccepted offer theory. And a note to all other courts of appeals: Don’t try this at home.”
“BLP invites us to try this at home,” the Eleventh Circuit wrote. “We decline.”
The court drew further support from the language of the offer itself, which made clear it would have no effect and would not even be filed unless accepted or used in a proceeding to determine costs.
“The court did not enter a judgment for the named plaintiffs,” the panel said. “The court did not issue an injunction. After the offers lapsed, and indeed after the district court entered its order dismissing the case, the legal relationship between BLP and the named plaintiffs was precisely the same as before the offers were made: the named plaintiffs had claims against BLP under the Telephone Consumer Protection Act; BLP retained all its defenses; no ruling had been made on the validity of the claims or defenses; and no judgment had been entered. BLP had not paid the plaintiffs, was not obligated to pay the plaintiffs, and had not been enjoined from sending out more faxes. The individual claims were not moot.”
As for the Rule 68 offers’ effect on the class claims, the panel reached the same conclusion. “[I]t is plain that this case still presents a live controversy,” the court said, noting Supreme Court precedent “that the necessary personal stake in a live class-action controversy sometimes is present even when the named plaintiff’s own individual claim has become moot.”
The named plaintiffs acted diligently to pursue the class claims, the panel added, refusing to draw a distinction as to when the motion for class certification was filed. Adopting an approach that would allow Rule 68 offers to moot class claims where a certification motion had yet to be filed would “produce unnecessary and premature certification motions in some cases and unnecessary gamesmanship in others,” the court said, following rulings from the Third, Fifth, and Ninth Circuits on the issue.
To read the opinion in Stein v. Buccaneers Limited Partnership, click here.
Why it matters: In finding that an unaccepted Rule 68 offer of full relief to named plaintiffs did not render the case at hand moot because the named plaintiffs had continued to diligently pursue class certification, the Eleventh Circuit joined a majority of circuits that have reached a similar conclusion.