In a putative class action for alleged violation of the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et seq., and notwithstanding the recent ruling by the Supreme Court of the United States in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), the U.S. District Court for the Southern District of New York recently granted a defendant’s request to enter judgment in the consumer’s favor providing all relief sought only by the plaintiff in his individual capacity.
A copy of the opinion is available at: Link to Opinion. Since the time of this ruling, the plaintiff filed an appeal to the U.S. Court of Appeals for the Second Circuit.
A plaintiff sued an entertainment services company for alleged violation of the TCPA. The district court denied the consumer’s motion for class certification and related motion for reconsideration. Thus, only the plaintiff’s individual TCPA claim for $500 in statutory damages or a maximum award of $1,500 if the violation was willful or knowing remained at issue.
The defendant offered the consumer $1,503 plus costs, and moved for an entry of judgment in favor of the plaintiff. The district court granted the defendant’s motion, holding that the U.S. Supreme Court’s decision in Campbell-Ewald did not reach the question of whether the district court had authority to enter a judgment for the plaintiff over the plaintiff’s objections and dismiss the action if the full amount in controversy were actually paid.
As you may recall, in Campbell-Ewald v. Gomez, 136 S. Ct. 663 (2016), the Supreme Court of the United States recently held that a lawsuit is not mooted when a plaintiff refuses to accept an offer of judgment. The Supreme Court expressly did not address the question of what happens when a defendant follows through with its offer by tendering complete individual relief, depositing the monetary relief with the court, and moving for entry of judgment.
Here, the District Court held that Campbell-Ewald did not “disrupt the Second Circuit’s precedent allowing for the entry of judgment for the plaintiff over plaintiff’s objections.” Instead, the Court held that Campbell-Ewald precludes a dismissal in favor of the defendant because of unaccepted, offered relief that obliges the defendant to pay nothing, where such offered relief is “only a proposal” with “no continuing efficacy.” 136 S. Ct. at 670.
The District Court looked to Second Circuit precedent which comported with this principal and made judgment and full relief in favor of the plaintiff necessary precursors to the dismissal of an action in the event of an unaccepted settlement offer. See, e.g., Tanasi v. New Alliance Bank, 786 F.3d 195, 200 (2d Cir. 2015) (“Absent [an] agreement, however, the district court should not enter judgment against the defendant if it does not provide complete relief.”); McCauley v. Trans Union, L.L.C., 402 F.3d 340, 342 (2d Cir. 2005) (vacating dismissal in defendant’s favor, which relieved it of the obligation to pay an unaccepted settlement, and remanding for entry of default judgment in favor of plaintiff); Bank v. Caribbean Cruise Line, Inc., 606 F. App’x 30, 31 (2d Cir. 2015) (“Under the law of our Circuit, an unaccepted Rule 68 offer alone does not render a plaintiff’s individual claims moot before the entry of judgment against the defendant but rather, only after the entry of judgment in the plaintiff’s favor is the controversy resolved such that the court lacks further jurisdiction.”)(internal citations omitted).