Radha Geismann, M.D., P.C. v. Zocdoc, Inc.

• Decision Date: 27 November 2018
• Docket Number: Docket No. 17-2692,August Term, 2017
• Citation: 909 F.3d 534
• 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

909 F.3d 534

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. 17-2692

August Term, 2017

United States Court of Appeals, Second Circuit.

Argued: May 14, 2018

Decided: November 27, 2018

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.

Adina H. Rosenbaum, Scott L. Nelson, Public Citizen Litigation Group, Washington, D.C., for Amicus Curiae Public Citizen, Inc., in support of Plaintiff-Appellant.

Brian Melendez, Barnes & Thornburg LLP, Minneapolis, Minnesota, for Amicus Curiae ACA International, in support of Defendant-Appellee.

Before: Sack and Raggi, Circuit Judges, and Gardephe, District Judge.^*

Sack, Circuit Judge:

Radha Geismann, M.D., P.C. ("Geismann") filed a class action complaint against ZocDoc, Inc. ("ZocDoc") in the United States District Court for the Southern District of New York, alleging that it¹ received unsolicited telecopies (colloquially and hereinafter "faxes") from ZocDoc in violation of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq . After Geismann filed the complaint and moved 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. The district court (Louis L. Stanton, Judge ) dismissed the action for lack of subject matter jurisdiction, Radha Geismann, M.D., P.C. v. ZocDoc, Inc. , 60 F.Supp.3d 404 (S.D.N.Y 2014) (" Geismann I "), reasoning that the rejected offer rendered the entire action moot. The court therefore entered judgment in favor of Geismann. Geismann appealed. Relying in large part on the Supreme Court's decision in Campbell-Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016), we vacated the judgment and remanded the matter to the district court for further proceedings. See Radha Geismann, M.D., P.C. v. ZocDoc, Inc. , 850 F.3d 507 (2d Cir. 2017) (" Geismann II ").

On remand, ZocDoc attempted to use another procedural rule to settle Geismann's individual claims: ZocDoc requested and obtained leave from the district court to deposit funds in the court's registry pursuant to Federal Rule of Civil Procedure 67. The funds that ZocDoc deposited with the court represented what ZocDoc regarded as the maximum possible damages Geismann could receive for its individual TCPA claims. The district court agreed with ZocDoc that its deposit mooted Geismann's individual claim, and accordingly entered judgment in favor of Geismann and dismissed what remained of the action. Radha Geismann, M.D., P.C. v. ZocDoc, Inc. , 268 F.Supp.3d 599 (S.D.N.Y. 2017) (" Geismann III "). We conclude that this was error and return the case to the district court again for further proceedings.

BACKGROUND

The Complaint

Geismann, a Missouri professional corporation, alleges that it received from ZocDoc, a Delaware corporation, two unsolicited faxes advertising a "patient matching service" for doctors. See Corrected First Amended Class Action Complaint ¶¶ 8-9, at Joint Appendix ("J.A.") 3 & Exhibits A and B to the Corrected First Amended Class Action Complaint, at J.A. 17–18. Both faxes stated, in a legend at the bottom of the fax, that if the recipient wished to "stop receiving faxes," he or she could call the domestic telephone number provided. See Exhibits A and B to the Corrected First Amended Class Action Complaint, at J.A. 17–18.

In 2014, Geismann filed this putative class action against ZocDoc in Missouri state court, alleging that these faxes were unsolicited advertisements in violation of the TCPA, 47 U.S.C. § 227. The TCPA 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 specified notice requirements. Id. § 227(b)(1)(C). The TCPA defines "unsolicited advertisement" as "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." Id. § 227(a)(5). Geismann sought between $500 and $1,500 in statutory damages for each alleged TCPA violation, an injunction prohibiting ZocDoc from sending similar faxes in the future, and costs.²

On the same day that it filed its complaint in state court, Geismann filed a separate motion for class certification pursuant to Missouri law. Geismann defined the proposed class as "[a]ll persons who on or after four years prior to the filing of this action, were sent telephone facsimile messages of material advertising [a] patient matching service for doctors by or on behalf of Defendant." Radha Geismann, M.D., P.C. v. ZocDoc, Inc. , No. 14-cv-7009 (S.D.N.Y.), ECF No. 5, at 2.

On March 13, 2014, ZocDoc removed the action to the United States District Court for the Eastern District of Missouri. Two weeks later, ZocDoc made an offer of judgment to Geismann pursuant to Federal Rule of Civil Procedure 68³ for: (i) $6,000, plus reasonable attorney's fees, in satisfaction of Geismann's individual claims, and (ii) an injunction prohibiting ZocDoc from engaging in the alleged statutory violations in the future. Geismann rejected ZocDoc's offer because it provided no relief to the other members of the class. ZocDoc subsequently moved to transfer the case to the United States District Court for the Southern District of New York. The district court granted ZocDoc's motion on August 26, 2014.

Geismann I Proceedings in the District Court

After the case was transferred to the Southern District of New York, ZocDoc moved to dismiss the complaint, primarily on the ground that its offer of judgment provided full satisfaction of Geismann's claim, so the action was moot. On September 26, 2014, the district court granted ZocDoc's motion to dismiss for lack of subject-matter jurisdiction, reasoning that, as to Geismann's individual claims, ZocDoc's Rule 68 offer "more than satisfies any recovery Geismann could make," so "there remain[ed] no case or controversy." Geismann I , 60 F.Supp.3d at 406–07. The court denied Geismann's motion for class certification, reasoning that Geismann could not adequately represent the class without a claim of its own. Id. at 407. The court accordingly entered judgment in the amount and under the terms of the rejected settlement offer, and dismissed the action as moot. Id.

Geismann timely appealed.

Geismann II

On January 20, 2016, after we held oral argument but before we issued a decision, the Supreme Court handed down its decision in Campbell-Ewald Co. v. Gomez , ––– U.S. ––––, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). Campbell-Ewald 's procedural posture was similar to the Geismann I appeal then before us: The plaintiff filed a putative TCPA class action and the defendant made a Rule 68 offer of judgment to satisfy the plaintiff's individual claims, which the plaintiff rejected. Id. at 667–68. The Supreme Court decided that the defendant's unaccepted Rule 68 offer did not render the action moot because "[a]n unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect" on the plaintiff's individual claim. Id. at 670 (internal quotation marks omitted). With no settlement offer still operative, the Supreme Court reasoned, "the parties remained adverse" and "both retained the same stake in the litigation they had at the outset." Id. at 670-71. The Supreme Court further noted that "[w]hile a class lacks independent status until certified, a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted." Id. at 672 (internal citation omitted). However, the Supreme Court left open the possibility that "the result would be different if a defendant deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount," reserving that question "for a case in which it is not hypothetical." Id.

On February 1, 2016, while Geismann's appeal in Geismann II remained pending and after the Supreme Court issued its decision in Campbell-Ewald , ZocDoc filed a motion with the district court seeking to deposit a check in the amount of $6,100 payable to the clerk of the district court in satisfaction of judgment. The district court granted the request, reasoning that the Supreme Court's decision in Campbell-Ewald "favor[s] deposit of judgments with the Court" in these circumstances. Order for Deposit in Interest Bearing Account, filed February 3, 2016, at J.A. 19–20.

On March 9, 2017, we decided Geismann's appeal. See Geismann II , 850 F.3d 507. We vacated the district court's judgment and remanded the case for further proceedings. We concluded that "[i]n light of Campbell-Ewald , the district court's conclusion in this case that Geismann's claim was 'mooted by the amount and content of the Rule 68 offer made by ZocDoc' [was] incorrect." Id. at 512 (quoting Geismann I , 60 F.Supp.3d at 407 ). We explained that, notwithstanding ZocDoc's post-judgment deposit with the district court, the case did not "match[ ] the hypothetical posed by Campbell-Ewald ," reasoning that because ZocDoc's rejected offer of settlement had "no continuing efficacy," the deposit was made "pursuant to and in furtherance of a judgment that should not have been entered in the first place."...