Jeffrey Stein, D.D.S., M.S.D., P.A. v. Buccaneers Ltd.

• Decision Date: 01 December 2014
• Docket Number: No. 13–15417.,13–15417.
• Citation: 772 F.3d 698
• Parties: Jeffrey STEIN, D.D.S., M.S.D., P.A. et al., Plaintiff–Appellant, v. BUCCANEERS LIMITED PARTNERSHIP, Defendant–Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

772 F.3d 698

Jeffrey STEIN, D.D.S., M.S.D., P.A. et al., Plaintiff–Appellant,

v.BUCCANEERS LIMITED PARTNERSHIP, Defendant–Appellee.

No. 13–15417.

United States Court of Appeals, Eleventh Circuit.

Dec. 1, 2014.

Joseph J. Siprut, Gregg M. Barbakoff, Siprut, PC, Chicago, IL, James M. Thomas, Law Office of James M. Thomas, Esq. PA, Dunedin, FL, for Plaintiff–Appellant.

Thomas Emerson Scott, Jr., Scott Allan Cole, Cole Scott & Kissane, PA, Miami, FL, Barry Adam Postman, Justin C. Sorel, Cole Scott & Kissane, PA, West Palm Beach, FL, David Simon Cohen, Buccaneers Limited Partnership, Tampa, FL, for Defendant–Appellee.

Appeal from the United States District Court for the Middle District of Florida. D.C. Docket No. 8:13–cv–02136–SDM–AEP.

Before MARTIN, Circuit Judge, and EATON,^* Judge, and HINKLE, ^** District Judge.

HINKLE, District Judge:

This case presents the question whether a defendant may moot a class action through an unaccepted Federal Rule of Civil Procedure 68 offer of complete relief to the named plaintiffs—but not to class members—before the named plaintiffs move to certify the class. In the circumstances of this case, the answer is no. We join the majority of circuits that have addressed the issue.

I. The Proceedings in the District Court

Six named plaintiffs filed this proposed class action in Florida state court against the defendant Buccaneers Limited Partnership (“BLP”). The complaint alleged that BLP sent unsolicited faxes to the named plaintiffs and more than 100,000 others, that the faxes advertised tickets to National Football League games involving the Tampa Bay Buccaneers, and that sending the unsolicited faxes violated the Telephone Consumer Protection Act, see47 U.S.C. § 227(b)(1)(C), and its implementing regulations, see47 C.F.R. § 64.1200 & 68.318(d) (2013).

The named plaintiffs sought to represent a nationwide class of recipients of the unsolicited faxes. The complaint demanded statutory damages of $500 per violation, trebled to $1,500 based on BLP's willfulness, and an injunction against further violations.

The plaintiffs served process on BLP on August 1, 2013. BLP removed the action to federal court on August 16. Three days later, on August 19, BLP served on each named plaintiff an offer of judgment under Federal Rule of Civil Procedure 68. The offer to the first named plaintiff, who alleged in the complaint that he had received three faxes, provided in full:

Pursuant to Rule 68 of the Federal Rules of Civil Procedure, Defendant, BUCCANEERS LIMITED PARTNERSHIP, hereby offers to allow Judgment to be entered against it in this action in the amount of $4,500.00 as well as all reasonable costs incurred to date by JEFFREY M. STEIN, D.D.S., M.S.D., P.A. to be decided by the Court, and an entry of a stipulated injunction enjoining the Defendant from any future violations of 47 U.S.C. § 227, 47 C.F.R. 64.1200, and 47 C.F.R. 68.318(d). The offer extended herein is intended to fully satisfy the individual claims of JEFFREY M. STEIN, D.D.S., M.S.D., P.A. made in this action or which could have been made in this action, and to the extent the offer extended does not do so, BUCCANEERS LIMITED PARTNERSHIP hereby offers to provide JEFFREY M. STEIN, D.D.S., M.S.D., P.A. with any other relief which is determined by the Court to be necessary to fully satisfy all of the individual claims of JEFFREY M. STEIN, D.D.S., M.S.D., P.A. in the action. This offer of judgment is made for the purposes specified in Federal Rule of Civil Procedure 68, and is not to be construed as either an admission that Defendant, BUCCANEERS LIMITED PARTNERSHIP is liable in this action, or that the Plaintiff, JEFFREY M. STEIN, D.D.S., M.S.D., P.A., has suffered any damage. This Offer of Judgment shall not be filed with the Court unless (a) accepted or (b) in a proceeding to determine costs. The Plaintiff must serve written acceptance of this offer within fourteen (14) days, or this offer will be deemed rejected.

The offers to the other named plaintiffs were identical except for the names of the offerees and amounts of the offers; one was for $7,500, one was for $3,000, and three were for $1,500 each, based on the number of faxes the complaint alleged the offeree had received.

Two days later, on August 21, BLP moved to dismiss for lack of jurisdiction, asserting that the unaccepted Rule 68 offers rendered the case moot.

The motion stirred the plaintiffs to action. On August 22, the plaintiffs moved to certify a class. This was long before the deadline under the Local Rules for filing such a motion. On August 28, the district court denied the motion to certify, saying it was “terse” and “admittedly (in fact, purposefully) premature.”

The Rule 68 offers set the deadline for acceptance as 14 days after service of the offers. The applicable counting rules, seeFed.R.Civ.P. 6, extended the deadline 3 days because the offers were served electronically, and further extended the deadline to the next business day. So the deadline for acceptance was September 9. The plaintiffs did not accept the offers, and the deadline passed.

On October 24, the district court entered an order concluding the action was indeed moot, granting the motion to dismiss, and directing the clerk to close the case. The named plaintiffs received no money, no injunction, and no judgment. They brought this appeal.

II. The Statutory Claim

The Telephone Consumer Protection Act makes it illegal to send unsolicited faxes like those the plaintiffs allege BLP sent. See47 U.S.C. § 227(b)(1)(C). The Act creates a private right of action in favor of anyone who receives such a fax. Id. § 227(c)(5). The Act provides statutory damages of $500 for each violation, trebled to $1,500 for a violation that is willful. Id.

Federal Rule of Civil Procedure 23 authorizes class actions when specific conditions are met. The Telephone Consumer Protection Act does not explicitly address the application of Rule 23 to actions for statutory damages. The plaintiffs assert, and we assume without deciding, that class members may recover statutory damages in a class action when the conditions of Rule 23 are met, so long, of course, as the case is not moot. The only question presented on this appeal is whether BLP's Rule 68 offers rendered the case moot.

III. The Standard of Review

We review factual findings underlying a mootness decision for clear error. We review de novo the legal issue of whether, based on the facts, a case is moot. Here the facts are undisputed, so our review of the only matter at issue—the legal effect of the undisputed facts—is de novo. See, e.g., Zinni v. ER Solutions, Inc., 692 F.3d 1162, 1166 (11th Cir.2012).

IV. Mootness

A case is moot “when it no longer presents a live controversy with respect to which the court can give meaningful relief.” Cameron–Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240, 1245 (11th Cir.2003) (quoting 31 Foster Children v. Bush, 329 F.3d 1255, 1263 (11th Cir.2003)). A plaintiff must have “a legally cognizable interest in the outcome.” Id. (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969); 31 Foster Children, 329 F.3d at 1263). And this must be true from beginning to end, not just when the case is filed.

Here mootness turns on two issues of first impression in this circuit. The first is whether an individual plaintiff's claim becomes moot when the plaintiff does not accept a Rule 68 offer of judgment that, if accepted, would provide all the relief the plaintiff seeks. The second is whether, if the answer is yes and 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.

A. The Rule 68 Offers' Effect on the Named Plaintiffs' Claims

We begin with the effect of an unaccepted Rule 68 offer on an individual plaintiff's claim. Rule 68 provides: “An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.” An unaccepted offer is admissible in a proceeding to determine costs because of Rule 68(d): “If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” That is the whole point of Rule 68: a party who rejects an offer, litigates, and does not get a better result must pay the other side's costs. A defendant who wishes to offer complete relief need not invoke Rule 68; the defendant can simply offer complete relief, including the entry of judgment. See, e.g., Doyle v. Midland Credit Mgmt., Inc., 722 F.3d 78, 80–81 (2d Cir.2013). BLP did not do that.

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. When the deadline for accepting these offers passed, they were “considered withdrawn” and were “not admissible.” SeeFed.R.Civ.P. 68(b). The plaintiffs could no longer accept the offers or require the court to enter judgment. In short, the plaintiffs still had their claims, and BLP still had its defenses. 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.

Four justices of the United States Supreme Court—the only four who have weighed in on this issue—have adopted precisely this analysis. In Genesis Healthcare Corp. v. Symczyk, ––– U.S. ––––, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013), a collective action under the Fair Labor Standards Act, the parties stipulated that an unaccepted Rule 68 offer mooted the individual plaintiff's claim. The majority accepted the stipulation without addressing the issue. Id. at 1528–29. But Justice Kagan, writing for four dissenters, said this:

That thrice-asserted view [that the defendant's offer mooted...