Chen v. Allstate Insurance Co., 041216 FED9, 13-16816

Docket Nº:13-16816
Opinion Judge:FISHER, Circuit Judge:
Party Name:Richard Chen; Florencio Pacleb, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. Allstate Insurance Company, Defendant-Appellant.
Attorney:Mark J. Levin (argued), Ballard Spahr LLP, Philadelphia, Pennsylvania; Daniel M. Benjamin, Ballard Spahr LLP, San Diego, California; and Scott M. Pearson, Ballard Spahr LLP, Los Angeles, California, for Defendant-Appellant.
Judge Panel:Before: Barry G. Silverman, Raymond C. Fisher and Richard C. Tallman, Circuit Judges.
Case Date:April 12, 2016
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Richard Chen; Florencio Pacleb, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.

Allstate Insurance Company, Defendant-Appellant.

No. 13-16816

United States Court of Appeals, Ninth Circuit

April 12, 2016

Argued and Submitted March 22, 2016 San Francisco, California

Appeal from the United States District Court 4:13-cv-00685-PJH for the Northern District of California Phyllis J. Hamilton, Chief District Judge, Presiding

Mark J. Levin (argued), Ballard Spahr LLP, Philadelphia, Pennsylvania; Daniel M. Benjamin, Ballard Spahr LLP, San Diego, California; and Scott M. Pearson, Ballard Spahr LLP, Los Angeles, California, for Defendant-Appellant.

F. Paul Bland, Jr. (argued) and Claire Prestel, Public Justice, P.C., Washington, D.C.; Abbas Kazerounian, Kazerouni Law Group, APC, Costa Mesa, California; Joshua B. Swigart, Hyde & Swigart, San Diego, California; Todd M. Friedman, Law Offices of Todd Friedman, P.C., Beverly Hills, California; and Spencer J. Wilson, Public Justice, P.C., Oakland, California, for Plaintiffs-Appellees.

Kate Comerford Todd and Tyler R. Green, Chamber of Commerce of the U.S., Washington, D.C.; Eric J. Ellman, Consumer Data Industry Association, Washington, D.C.; Theodore J. Boutrous Jr., Gibson, Dunn & Crutcher LLP, Los Angeles, California; Robert E. Dunn, Gibson, Dunn & Crutcher LLP, Palo Alto, California; and Gregory G. Garre, Latham & Watkins LLP, Washington, D.C., for Amici Curiae Chamber of Commerce of the United States and Consumer Data Industry Association.

Timothy Sandefur and Anastasia P. Boden, Pacific Legal Foundation, Sacramento, California, for Amicus Curiae Pacific Legal Foundation.

James M. Nelson, Greenberg Traurig, LLP, Sacramento, California; James N. Boudreau, Greenberg Traurig, LLP, Philadelphia, Pennsylvania; Thomas S. Knox, Knox Lemmon & Anapolsky, LLP, Sacramento, California; and John F. Farraher, Jr., Greenberg Traurig, LLP, Boston, Massachusetts, for Amicus Curiae California Retailers Association.

James C. Sturdevant, The Sturdevant Law Firm, San Francisco, California, for Amicus Curiae National Association of Consumer Advocates.

Scott L. Nelson, Allison M. Zieve, and Adina H. Rosenbaum, Public Citizen Litigation Group, Washington, D.C., for Amicus Curiae Public Citizen, Inc.

Before: Barry G. Silverman, Raymond C. Fisher and Richard C. Tallman, Circuit Judges.

SUMMARY[*]

Mootness / Offers of Judgment

The panel affirmed the district court's denial of a motion to dismiss a putative class action under the Telephone Consumer Protection Act as moot following defendant's unaccepted offer of judgment on a plaintiff's individual claims under Federal Rule of Civil Procedure 68.

The panel held that the case was not moot because first, even if the district court entered judgment affording the plaintiff complete relief on his individual claims for damages and injunctive relief, mooting those claims, he would still be able to seek class certification under Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011), which remains good law pursuant to Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014), aff'd, 136 S.Ct. 663 (2016). Second, even if Pitts were not binding, and the defendant could moot the entire action by mooting the plaintiff's individual claims, the individual claims were not yet moot because the plaintiff had not yet actually received relief. The panel held that it would not direct the district court to enter judgment, over the plaintiff's objections, on his individual claims when he had not yet had a fair opportunity to move for class certification.

OPINION

FISHER, Circuit Judge:

Florencio Pacleb filed a class action complaint against Allstate Insurance Company, alleging he received unsolicited automated telephone calls to his cellular telephone, in violation of the Telephone Consumer Protection Act. Taking a cue from a recent Supreme Court case, Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016) ("Campbell-Ewald"), on appeal Allstate deposited $20, 000 in full settlement of Pacleb's individual monetary claims in an escrow account "pending entry of a final District Court order or judgment directing the escrow agent to pay the tendered funds to Pacleb, requiring Allstate to stop sending non-emergency telephone calls and short message service messages to Pacleb in the future and dismissing this action as moot." On the basis of these actions, Allstate argues we should "reverse the denial of Allstate's motion to dismiss for lack of subject matter jurisdiction and remand to the District Court to order disbursement of the tendered funds to Pacleb, the entry of judgment in favor of Pacleb and the dismissal of this action as moot." We disagree.

First, even if the district court entered judgment affording Pacleb complete relief on his individual claims for damages and injunctive relief, mooting those claims, Pacleb would still be able to seek class certification under Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011). Although Allstate argues Pitts is no longer good law after Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013), we rejected that very argument in Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014) ("Gomez"), aff'd, 136 S.Ct. 663 (2016). Pitts therefore remains the law of this circuit.1

Second, even if Pitts were not binding, and Allstate could moot the entire action by mooting Pacleb's individual claims for damages and injunctive relief, those individual claims are not now moot, and we will not direct the district court to moot them by entering judgment on them before Pacleb has had a fair opportunity to move for class certification. Under Supreme Court and Ninth Circuit case law, a claim becomes moot when a plaintiff actually receives complete relief on that claim, not merely when that relief is offered or tendered. Where, as here, injunctive relief has been offered, and funds have been deposited in an escrow account, relief has been offered, but it has not been received. Pacleb's individual claims, therefore, are not now moot. Nor will we direct the district court to moot them. Assuming arguendo a district court could enter a judgment according complete relief on a plaintiff's individual claims over the plaintiff's objections, thereby mooting those claims, such action is not appropriate here. As the Supreme Court said in Campbell-Ewald, 136 S.Ct. at 672, "[w]hile a class lacks independent status until certified, see Sosna v. Iowa, 419 U.S. 393, 399 (1975), a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted." Because Pacleb has not yet had a fair opportunity to move for class certification, we will not direct the district court to enter judgment, over Pacleb's objections, on his individual claims.

For the above reasons, we affirm the order denying Allstate's motion to dismiss for lack of subject matter jurisdiction.

BACKGROUND

In 2013, Richard Chen and Florencio Pacleb filed a class action complaint against Allstate Insurance Company, asserting violations of the Telephone Consumer Protection Act (TCPA). The TCPA makes it unlawful, in part, "to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice . . . to any telephone number assigned to a . . . cellular telephone service, . . . unless such call is made solely to collect a debt owed to or guaranteed by the United States." 47 U.S.C. § 227(b)(1)(A). An aggrieved person may bring an action to enjoin a violation of this provision or to seek actual or statutory damages. See id. § 227(b)(3). Statutory damages are $500 per violation. See id. § 227(b)(3)(B). If a violation is willful or knowing, a court may treble the award. See id. § 227(b)(3).

Chen alleged he received eight calls from Allstate in violation of § 227(b)(1)(A). Pacleb alleged he received five such calls. In Pacleb's case, the automated calls asked for an individual named Frank Arnold. Chen and Pacleb brought their claims "on behalf of themselves and all others similarly situated, " as members of a proposed class defined as:

All persons within the United States who received any telephone calls from Defendant to said person's cellular telephone made through the use of any automatic telephone dialing system and such person had not previously consented to receiving such calls within the four years prior to the filing of this Complaint.

In their first cause of action, for negligent violations of the TCPA, Chen and Pacleb sought for themselves and the members of the proposed class $500 in statutory damages for each violation and injunctive relief prohibiting such conduct in the future. In their second cause of action, for knowing or willful violations of the TCPA, they sought $1500 in statutory damages for each violation and similar injunctive relief. The plaintiffs subsequently abandoned their claims for knowing or willful violations of the TCPA.

In April 2013, before any motion for class certification had been made, Allstate made an offer of judgment to Chen and Pacleb under Rule 68 of the Federal Rules of Civil Procedure. Allstate offered to allow judgment to be taken against it by Chen and Pacleb "on their individual claims in the amount of $15, 000.00 and $10, 000.00, respectively, together with reasonable attorneys' fees and costs that have been accrued to date." With respect to Chen and Pacleb's demand for injunctive relief, Allstate agreed "to stop sending non-emergency telephone calls and short message service messages to [them] in the future." The offer was made "solely for the purposes specified in Rule 68" and provided Chen and...

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