Bais Yaakov of Spring Valley v. Educ. Testing Serv.

• Decision Date: 31 January 2021
• Docket Number: No. 13-CV-4577 (KMK),13-CV-4577 (KMK)
• Parties: BAIS YAAKOV OF SPRING VALLEY, on behalf of itself and all others similarly situated, Plaintiff, v. EDUCATIONAL TESTING SERVICE, Defendant.
• Court: U.S. District Court — Southern District of New York

BAIS YAAKOV OF SPRING VALLEY, on behalf of itself and all others similarly situated, Plaintiff, v. EDUCATIONAL TESTING SERVICE, Defendant.

No. 13-CV-4577 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

January 31, 2021

OPINION & ORDER

Appearances:

Aytan Y. Bellin, Esq.

Erik L. Shawn, Esq.

Bellin & Associates, LLC

White Plains, NY

Counsel for Plaintiff

Roger Furman, Esq.

Los Angeles, CA

Counsel for Plaintiff

J. Todd Kennard, Esq.

Michael M. Klotz, Esq.

Sharyl A. Reisman, Esq.

Jones Day

Columbus, OH

New York, NY

Counsel for Defendant

KENNETH M. KARAS, District Judge:

Plaintiff Bais Yaakov of Spring Valley ("Bais Yaakov" or "Plaintiff") brings this Action against Defendant Educational Testing Service ("ETS" or "Defendant"), alleging that Defendant sent Plaintiff an unsolicited fax advertisement for goods and services without the proper opt-out notices in violation of the Telephone Consumer Protection Act (the "TCPA"), 47 U.S.C. § 227. (See Second Am. Compl. ("SAC") (Dkt. No. 79).) Before the Court is Defendant's Renewed Motion for Entry of Judgment and To Dismiss for Lack of Subject Matter Jurisdiction (the "Motion"). (Not. of Mot. (Dkt. No. 358).) For the following reasons, Defendant's Motion is granted.

I. Background

The Court has described the background of this case in depth in two prior Opinion & Orders. (See Op. & Order ("2017 Op.") (Dkt. No. 233); Op. & Order ("2019 Op.") (Dkt. No. 303).) Here, the Court reviews and updates this background only as needed to resolve the Motion.

The SAC contains class allegations. (SAC ¶¶ 21-35.) The SAC identifies three putative classes: (1) persons who received at least one solicited or unsolicited advertisement containing a faulty opt-out notice ("Class A"); (2) persons who received at least one unsolicited advertisement containing a faulty opt-out notice ("Class B"); and (3) persons in New York that received an advertisement without consent or containing a faulty opt-out notice ("Class C"). (Id. at ¶ 22.) On July 11, 2017, the Court denied Plaintiff's motion to certify a class of individuals that received solicited advertisements, disposing of Plaintiff's Class A allegations. (Dkt. No. 240.) On March 18, 2019, the Court granted summary judgment as to Plaintiff's state law claims, disposing of Plaintiff's Class C allegations. (2019 Op. 12, 47-48.) On July 1, 2019, Plaintiff moved to certify one class and one subclass, both falling under Class B. (Dkt. No. 314.) On July 8, 2020, the Court denied this motion. (Dkt. No. 355.)

Apart from its class allegations, Plaintiff has made out an individual claim for $10,500 in statutory damages based on Defendant's seven willful or knowing violations of the TCPA. (Dkt. No. 138, at 23-24.) Plaintiff alleges that Defendant did not obtain consent to send it a fax ad,and that Defendant's fax ad contained an opt-out notice that was deficient for various reasons. (Id.) Plaintiff also seeks an injunction prohibiting Defendant from further violating the TCPA. (SAC 14.)

After denying Plaintiff's July 1, 2019 motion to certify, the Court ordered the Parties to propose next steps in the Action. (Dkt. No. 355.) In response, Defendant filed a joint request that it be permitted to file the instant Motion. (Dkt. No. 356.) This request clarified that Plaintiff intended to oppose the Motion. (Id.) The Court ordered a briefing schedule. (Dkt. No. 357.)

On August 14, 2020, Defendant submitted its Motion. (Not. of Mot.; Def.'s Mem. of Law in Supp. of Mot. ("Def.'s Mem") (Dkt. No. 359); Decl. of Sharyl A. Reisman ("Reisman Decl.") (Dkt. No. 360); Decl. of Glenn C. Schroeder ("Schroeder Decl.") (Dkt. No. 361).) With respect to Plaintiff's damages claims, Defendant's Motion sought an order (1) entering judgment of $12,000 plus applicable costs for Plaintiff against Defendant; and (2) dismissing these claims as moot pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. (Not. of Mot.) One day before filing its Motion, Defendant sent a $12,000 check to Plaintiff. (Reisman Decl. ¶ 3; id. Ex. A (Dkt. No. 360-1).) Defendant's counsel represented that this payment was "unconditional," regardless of the outcome of this Action. (Reisman Decl. ¶ 4.) Counsel further represented that, if Plaintiff returned the check, Defendant was prepared to deposit the funds with the Court for Plaintiff's benefit. (Id. at ¶ 5.) Defendant argues that its consent to judgment on the full amount of Plaintiff's individual claim moots Plaintiff's claim for damages. (Def.'s Mem. 6-9.)

With respect to Plaintiff's request for injunctive relief, Defendant's Motion sought an order (1) dismissing Plaintiff's request as moot; (2) dismissing Plaintiff's request as meritless; or (3) enjoining Defendant from sending faxes that violate the TCPA to Plaintiff. (Not. of Mot.)Defendant's Senior Vice President and General Counsel described various efforts to "ensure that no future unsolicited fax is sent to Bais Yaakov in violation of the TCPA." (Schroeder Decl. ¶ 8.) These efforts included instructing Defendant's employees to remove Plaintiff's fax number from its internal databases, confirming that this had been done, instructing Defendant's employees to add a note to pertinent files stating that Plaintiff's fax number shall not be used in the future, and confirming that Defendant's staff understand that Plaintiff's fax number is not to be used in the future. (Id. at ¶¶ 9-10.) Defendant argues that these voluntary steps ensure that the alleged harm to Plaintiff will not recur, and moot Plaintiff's claim for injunctive relief. (Def.'s Mem. 10-11.) Alternatively, Defendant argues that Plaintiff's request for injunctive relief is meritless because it cannot show irreparable harm or likely future faxes. (Id. at 11-12.) Should these arguments fail, Defendant consents to entry of an injunction preventing it from committing unsolicited fax violations of the TCPA. (Id. at 12; see also SAC 14 (requesting "an injunction against Defendants prohibiting them from committing further violations of the TCPA and regulations described above").)

On August 28, 2020, Plaintiff opposed the Motion. (Pl.'s Corrected Mem. of Law in Opp'n to Mot. ("Pl.'s Mem.") (Dkt. No. 364); Decl. of Aytan Y. Bellin in Opp'n to Mot. ("Bellin Decl.") (Dkt. No. 362).)¹ Shortly before filing its Opposition, Plaintiff wrote a letter to Defendant (1) rejecting and returning the $12,000 check; and (2) rejecting Defendant's "unilateral agreement" not to send any unsolicited fax advertisements to Bais Yaakov. (Bellin Decl. ¶ 3 & Ex. A.) Plaintiff argues that its damages claim is not moot because, under the common law, a rejected tender of an amount due does not moot a dispute. (Pl.'s Mem. 2-6.)However, Plaintiff does not dispute that $12,000 would fully satisfy its individual claims. (See generally id.) Regarding its claim for injunctive relief, Plaintiff argues that Defendant's unilateral efforts do not moot its claim. (Id. at 6-8.) Plaintiff further argues that the Motion is procedurally improper for a ruling on the merits of its claim for injunctive relief, and that it need not show irreparable harm to qualify for an injunction under the TCPA. (Id. at 8-9.) Finally, Plaintiff argues that the relief to which Defendant consents is an unenforceable "obey-the-law" injunction. (Id. at 7.) While Plaintiff argues that the Court can "award any relief to which a party is entitled even if that relief is not specifically requested in the complaint," (id. at 7-8), Plaintiff does not propose or move for any relief beyond that requested in the SAC, (see generally id.).

On September 29, 2020, Defendant submitted its Reply. (Def.'s Reply in Supp. of Mot. ("Def.'s Reply") (Dkt. No. 365).)

II. Analysis

The Court reaches the following conclusions. First, it enters judgment of $12,000 plus applicable costs for Plaintiff. Second, while Plaintiff's request for injunctive relief is not moot, it is meritless, and the Court enters judgment against it. And third, as a result of the first two conclusions, Plaintiff's case is moot and must be dismissed for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1). The Court discusses each of these conclusions in turn.

A. Plaintiff's Damages Claim

The Second Circuit has suggested that it is appropriate for a court to enter judgment, even over the plaintiff's objection, where the defendant has agreed to provide the plaintiff's sought-after relief. In Radha Geismann, M.D., P.C. v. ZocDoc, Inc., 909 F.3d 534 (2d Cir. 2018), cert. denied, 139 S. Ct. 1605 (2019), the Second Circuit stated that "[its] decisions appear to recognizethat where a defendant surrenders to 'complete relief' in satisfaction of a plaintiff's claims, the district court may enter default judgment against the defendant—even without the plaintiff's agreement thereto." 909 F.3d at 542; see also Leyse v. Lifetime Ent. Servs., LLC, 679 F. App'x 44, 48 (2d Cir. 2017) (summary order) ("[A]n unaccepted Fed. R. Civ. P. 68 offer for complete relief . . . , if rejected, may nonetheless permit a court to enter a judgment in the plaintiff's favor.").

Plaintiff argues that the Second Circuit's statement in ZocDoc is dictum. (Pl.'s Mem. 5-6.) This is accurate. The Second Circuit in ZocDoc reversed an entry of judgment on the basis that a deposit under Fed. R. Civ. P. 67 did not moot the plaintiff's claims. ZocDoc, 909 F.3d at 543 ("[W]e conclude that [the defendant's] Rule 67 deposit did not provide [the plaintiff] with an entitlement to complete relief and therefore did not render its TCPA claim moot."). In contextualizing this conclusion, the Second Circuit characterized the surrender of complete relief as an "other way[]" that a plaintiff's claim could become moot. ZocDoc, 909 F.3d at 542. Given this context, the Court finds this dictum "highly persuasive." Janese v. Fay, 692 F.3d 221, 227 (2d Cir. 2012). This is particularly true because at least two non-precedential summary orders have treated this conclusion as settled law. See Hepler v. ...