Radha Geismann, M.D., P.C. v. Zocdoc, Inc., Docket No. 14-3708

• Decision Date: 09 March 2017
• Docket Number: August Term, 2014,Docket No. 14-3708
• Parties: RADHA GEISMANN, M.D., P.C., individually and on behalf of all others similarly situated, Plaintiff–Appellant, v. ZOCDOC, INCORPORATED, Defendant–Appellee, John Does 1–10, Defendants.
• Court: U.S. Court of Appeals — Second Circuit

850 F.3d 507

RADHA GEISMANN, M.D., P.C., individually and on behalf of all others similarly situated, Plaintiff–Appellant,

v. ZOCDOC, INCORPORATED, Defendant–Appellee,John Does 1–10, Defendants.^*

Docket No. 14-3708

August Term, 2014

United States Court of Appeals, Second Circuit.

Argued: June 5, 2015

Final Submission: February 1, 2016

Decided: March 9, 2017

GLENN L. HARA (David M. Oppenheim, on the brief), Anderson + Wanca, Rolling Meadows, Illinois, for Plaintiff–Appellant.

BLAINE C. KIMREY (Charles J. Nerko, Vedder Price P.C., New York, New York, Bryan K. Clark, on the brief), Vedder Price P.C., Chicago, Illinois, for Defendant–Appellee.

Before: Sack, Hall, and Carney, Circuit Judges.

Sack, Circuit Judge:

Plaintiff–appellant Radha Geismann, M.D., P.C. ("Geismann"), appeals from the district court's dismissal of its putative class action against the defendant–appellee ZocDoc, Inc. ("ZocDoc"), alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Geismann's suit stems from two unsolicited telecopies (colloquially and hereinafter "faxes") it allegedly received from ZocDoc. After Geismann filed a complaint and motion for class certification, ZocDoc made a settlement offer to Geismann as to its individual claims pursuant to Federal Rule of Civil Procedure 68. Geismann rejected the offer. ZocDoc then moved to dismiss the action for lack of subject matter jurisdiction on the ground that its offer afforded Geismann complete relief, thereby mooting the action. The United States District Court for the Southern District of New York (Louis L. Stanton, Judge ) granted the motion, agreeing with ZocDoc that the rejected offer, which the court concluded would have afforded Geismann complete relief on its individual claims, rendered the entire action moot, notwithstanding the pending class–certification motion. The court entered judgment in Geismann's favor under the terms offered by ZocDoc and dismissed the action. While this appeal was pending, the district court granted ZocDoc leave to deposit a check in the amount of $6,100.00 with the Clerk of the United States District Court for the Southern District of New York in satisfaction of judgment.

We conclude that the action was not and is not "moot." An unaccepted Rule 68 offer of judgment is, regardless of its terms, a legal nullity.

BACKGROUND

Geismann, a Missouri corporation, alleges that it received from ZocDoc, a Delaware corporation, two unsolicited faxes advertising a "patient matching service" for doctors. Joint Appendix ("J.A."¹ ) 43, 57–58. Both faxes stated that if the recipient wished to "stop receiving faxes," he or she could call a domestic telephone number provided in the fax. J.A. 57, 58.

In 2014, Geismann filed a complaint in Missouri state court² alleging that these faxes violated the TCPA,³ which prohibits, inter alia , the use of "any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless" the sender and recipient have an "established business relationship," the recipient volunteered its fax number directly to the sender or through voluntary participation in a directory or other public source, or the fax meets certain specified notice requirements. 47 U.S.C. § 227(b)(1)(C) ; see also id. § 227(a)(5) ("The term ‘unsolicited advertisement’ means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise.").

The complaint requested between $500.00 and $1,500.00 in damages for each TCPA violation, an injunction prohibiting ZocDoc from sending similar faxes in the future, and costs. See id . § 227(b)(3) (providing a private right of action for injunctive relief and damages in the amount of "actual monetary loss" or "$500 ... for each [ ] violation, whichever is greater," to be tripled at the court's discretion if the defendant "willfully or knowingly violated [the statute]").

The complaint also requested that the case be treated as a class action. Geismann filed a separate motion for class certification pursuant to Missouri law the same day that it filed the complaint. The certification motion contained a footnote explaining that Geismann filed the motion at the same time as the complaint because the "[d]efendants in class litigation have resorted to making individual settlement offers to named plaintiffs before a class action is certified in an attempt to ‘pick-off’ the putative class representative and thereby derail the class action litigation." Pl.'s State Ct. Mot. for Class Certification at 1 n.1 (J.A. 19).

On March 13, 2014, ZocDoc removed the action to the United States District Court for the Eastern District of Missouri, invoking federal question jurisdiction. See 28 U.S.C. §§ 1331, 1367. Two weeks later, ZocDoc made an offer of judgment to Geismann pursuant to Federal Rule of Civil Procedure 68 for (1) $6,000, plus reasonable attorney's fees,⁴ in satisfaction of Geismann's individual claims, and (2) an injunction prohibiting ZocDoc from engaging in the alleged statutory violations in the future. On April 8, 2014, Geismann rejected the offer but indicated that it would be willing to accept if ZocDoc would extend the same offer to all members of the putative class action. ZocDoc declined.

In August 2014, the district court granted ZocDoc's motion to transfer the action to the Southern District of New York. See 28 U.S.C. § 1404(a). ZocDoc then moved to dismiss the complaint, primarily on the ground that its offer of judgment mooted the action. Geismann disputed, inter alia , whether the unaccepted offer "provided full satisfaction of [its] claim," arguing that the TCPA provides for monetary damages per "violation," not per fax, entitling it to "recover for each of the multiple violations in each fax." Pl.'s Opp'n to Def.'s Mot. to Dismiss at 14 n.4, Geismann v. ZocDoc, Inc. , No. 14–cv–7009, 2014 WL 10752128 (S.D.N.Y. Sept. 25, 2014), ECF No. 53.

The district court disagreed, reasoning:

The monetary damages Geismann can recover individually under the TCPA for two unsolicited faxes [it] received ... are limited to $1,000, which could be trebled to not more than $3,000 if the Court finds that it was a willful and knowing violation. ZocDoc's offer of judgment not only adds Geismann's attorneys' fees, but is twice the trebled amount, and thus more than satisfies any recovery Geismann could make under the applicable statute.

Geismann v. ZocDoc, Inc. , 60 F.Supp.3d 404, 405–06 (S.D.N.Y. 2014). The court entered judgment in the amount and under the terms of the rejected settlement offer and dismissed the action as moot because, following the settlement offer and entry of judgment, "there remain[ed] no case or controversy." Id . at 407.

Geismann then brought this appeal. While the appeal was pending, ZocDoc requested leave to deposit a check in the amount of $6,100.00 payable to the clerk of the district court in satisfaction of judgment. Pl.'s Ltr. Mot. at 2–3, Geismann v. ZocDoc, Inc. , No. 14–cv–7009 (S.D.N.Y. Feb. 1, 2016), ECF No. 60. The court granted the request, reasoning that the Supreme Court's then–recent decision in Campbell–Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016), "favor[s] deposit of judgments with the Court" in these circumstances. Order for Deposit in Interest Bearing Account at 2, Geismann v. ZocDoc, Inc. , No. 14–cv–7009 (S.D.N.Y. Feb. 3, 2016), ECF No. 63.⁵

We ordered the parties to submit supplemental briefing addressing the effect of Campbell–Ewald on the issues presented in this appeal, and, on February 1, 2016, both parties made a responsive submission. ZocDoc argued that following the entry of judgment and deposit of funds with the clerk of the court, the plaintiff in this case, unlike the plaintiff in Campbell–Ewald , was not left "emptyhanded." Def.'s Supp. Br. at 2, 4. Geismann argued, inter alia , that Campbell–Ewald foreclosed the district court's disposition of this case because "an unaccepted settlement offer or offer of judgment does not moot a plaintiff's case no matter how good the terms." Pl.'s Supp. Br. at 1 (internal quotation marks omitted).

DISCUSSION

A. Standard of Review

"In considering a dismissal for lack of jurisdiction, we review the district court's factual findings for clear error and its legal conclusions de novo ." APWU v. Potter , 343 F.3d 619, 623–24 (2d Cir. 2003).

B. Jurisdiction

Our jurisdiction is limited by Article III, section 2, of the United States Constitution to "cases" and "controversies." Spencer v. Kemna , 523 U.S. 1, 7, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998). Where there is no unresolved case or controversy, "mootness occurs" and "the court—whether trial, appellate, or Supreme—loses jurisdiction over the suit, which therefore must be dismissed." Russman v. Bd. of Educ. of Enlarged City Sch. Dist. of City of Watervliet , 260 F.3d 114, 118–19 (2d Cir. 2001).

C. Campbell-Ewald

Geismann argues that the district court erred in dismissing its complaint for lack of subject matter jurisdiction because ZocDoc's proffered monetary damages did not provide complete relief as to Geismann's individual claims; the individual and putative class claims were therefore not moot. Alternatively, Geismann asks us to conclude, as a matter of first impression in this Circuit, that even if the offer was complete as to its individual claims, an individual judgment does not render moot a putative class claim, at least when a class-certification motion is pending. Cf. Tanasi v. New Alliance Bank , 786 F.3d 195, 198 (2d Cir. 2015), as amended (May 21, 2015), cert. denied , ––– U.S. ––––, 136 S.Ct. 979, 194 L.Ed.2d 3 (2016) (declining to address this question). While this appeal was pending before us, the Supreme Court decided Campbell–Ewald . Its decision made clear that an unaccepted Rule 68 offer of judgment does not render an action moot. Cam...