Scott v. Westlake Servs., LLC

• Decision Date: 06 June 2013
• Docket Number: No. 12 C 9289.,12 C 9289.
• Citation: 948 F.Supp.2d 898
• Parties: Etta SCOTT, on behalf of herself and others similarly situated, Plaintiff, v. WESTLAKE SERVICES, LLC d/b/a Westlake Financial Services, Defendant.
• Court: U.S. District Court — Northern District of Illinois

948 F.Supp.2d 898

Etta SCOTT, on behalf of herself and others similarly situated, Plaintiff,

v.WESTLAKE SERVICES, LLC d/b/a Westlake Financial Services, Defendant.

No. 12 C 9289.

United States District Court,

N.D. Illinois,

Eastern Division.

June 6, 2013.

Sergei Lemberg, Lemberg & Associates, LLC, Stamford, CT, Dmitry N. Feofanov, Chicagolemonlaw.Com, P.C., Lyndon, IL, for Plaintiff.

David Luther Hartsell, Brian Patrick O'Meara, Susan E. Groh, McGuireWoods LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

RUBEN CASTILLO, District Judge.

Etta Scott brings this putative class action against Westlake Services, LLC (“Westlake”), doing business as Westlake Financial Services, alleging violations of the Telephone Consumer Protection Act (the “TCPA” or the “Act”), 47 U.S.C. § 227 et seq. Westlake asserts that it made a full offer of relief to Scott on both of her claims prior to Scott moving for class certification and, consequently, her claims are moot. Therefore, presently before the Court is Westlake's motion to dismiss Scott's claims for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. For the reasons set forth herein, the Court finds that Scott's claims are indeed moot and that it accordingly lacks subject-matter jurisdiction over them. Hence, the Court grants Westlake's motion to dismiss.

RELEVANT FACTS

Westlake is a California business entity headquartered in Los Angeles. (R. 6, Am. Compl. ¶ 6.) Scott is a resident of Chicago, Illinois and has never had a business relationship with Westlake nor given Westlake permission to contact her on her cellular telephone. ( Id. ¶¶ 4–5.) Beginning in or around October 2012, Westlake placed automated calls to Scott's cellular telephone using an automatic telephone dialing system (“ATDS”). ( Id. ¶ 10) (R. 19–1, Def.'s Mem., Ex. A, Settlement E-mail). Scott alleges that Westlake placed a total of 20 such calls: with seven calls made on or about November 10, 2012; nine calls made on or about November 12, 2012; and four calls made on or about November 16, 2012. (R. 6, Am. Compl. ¶¶ 12–14, 16.) Therefore, Scott alleges that Westlake violated Section 227(b)(1)(A) of the TCPA by negligently, knowingly, or willfully placing these automated calls to her cellular telephone without her prior express consent as required by the Act.¹ ( Id. ¶¶ 1, 19.)

PROCEDURAL HISTORY

On November 20, 2012, Scott commenced this suit by filing a complaint with this Court in her individual capacity and on behalf of others similarly situated against Westlake Financial Network, Inc. for violations of the TCPA. (R. 1, Compl.) On January 17, 2013, Scott filed a first amended complaint, again in her individual capacity as well as on behalf of others similarly situated, against Westlake Services, LLC, doing business as Westlake Financial Services—the Defendant to this suit. (R. 6, Am. Compl.) Therefore, on January 17, 2013, Westlake Financial Network, Inc. was terminated as a Defendant to this suit. ( Id.)

In Count I of the amended complaint, Scott alleges that Westlake violated Section 227(b)(1)(A) of the TCPA by negligently placing multiple automated telephone calls to her and other putative class members' cellular telephones without their prior express consent. ( Id. ¶¶ 33–35.) In Count II of the amended complaint, Scott alleges that Westlake knowingly or willfully violated the TCPA by placing multiple automated telephone calls to her and other putative class members' cellular telephones without their prior express consent. ( Id. ¶¶ 38–40.)

Scott prays for injunctive relief, pursuant to Section 227(b)(3)(A) of the TCPA, prohibiting Westlake from further violating the Act.² ( Id. ¶ 7.) She also seeks statutory damages of $500, pursuant to Section 227(b)(3)(B) of the TCPA, for each and every automated call Westlake made in violation of the Act,³ and treble damages of up to $1,500, pursuant to Section 227(b)(3)(C) of the TCPA, for each and every automated call Westlake knowingly or willfully made in violation of the Act.⁴ ( Id.) In addition, Scott seeks an award of attorneys' fees and costs. ( Id.)

On February 5, 2013, after Scott commenced this cause of action, Westlake e-mailed her a settlement offer, which provided that Westlake would pay Scott “the sum of $1,500 for each and every dialer-generated telephone call made to” her. (R. 19–1, Def.'s Mem., Ex. A, Settlement E-mail.) Westlake also offered to pay Scott “all costs which she would recover if she were to prevail in the lawsuit, including the cost of any filing fee and any service fees which would be taxable as costs.” ( Id.) In addition, Westlake agreed to an injunction prohibiting itself from making any future calls to Scott without her prior express consent. ( Id.)

Westlake further stated that its records reflected a total of six dialer-generated calls made to Scott's cellular telephone during the alleged time period, but it offered to discuss the exact number of calls with Scott and her counsel in order to resolve any discrepancies over the number of dialer-generated calls actually made. ( Id.) (“[Westlake's] records, however, reflect that all of the calls made on [November 10, 12, and 16, 2012] were manually dialed and, further, that there were a total of only six dialer generated calls. If you would care to share with me the basis for your belief that the November 10, 12, and 16 calls were dialer generated, perhaps we can resolve this discrepancy.”) (emphasis supplied). On February 6, 2013, Scott rejected Westlake's offer and moved this Court to certify a class. (R. 14, Pl.'s Mot. Class Certification; R. 19–2, Def.'s Mem., Ex. B, Rejection E-mail.)

On February 13, 2013, Westlake moved to dismiss this case pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that Scott's claims are moot, thereby divesting this Court of subject-matter jurisdiction over them. (R. 18, Def.'s Mot.; R. 19, Def.'s Mem. at 3.) Westlake asserts that its e-mail of February 5, 2013 was an offer of complete relief made before Scott moved this Court to certify a class of plaintiffs. (R. 19, Def.'s Mem. at 3.) Westlake therefore alleges that Scott does not retain any personal interest in her claims, rendering them moot and subject to mandatory dismissal. ( Id.) Westlake argues that Scott cannot avoid a finding of mootness by moving for class certification after receiving an offer of full relief, nor can she do so by alleging that there is a dispute over the number of automated calls made. ( Id. at 4.) Westlake argues that its settlement offer was “unconditional,” as it offered to pay Scott $1,500, the maximum statutory penalty, “for each and every dialer-generated call,” and that limited discovery would confirm the exact number of calls. ( Id.) (R. 19–1, Def.'s Mem., Ex. A, Settlement E-mail).

On February 20, 2013, Scott responded to Westlake's motion to dismiss. (R. 23, Pl.'s Resp.) Scott argues that Westlake only offered relief for six of the 20 automated calls alleged in her complaint, and thus a “live” case remains between herself and Westlake due to the controversy regarding the number of automated calls, Westlake's offer was not one of full relief sufficient to moot her claims. ( Id. at 4–5.) Therefore, Scott argues that this Court retains subject-matter jurisdiction to adjudicate this “live” controversy. ( Id. at 4.)

On March 7, 2013, Westlake replied to Scott's response, arguing that Scott cannot characterize its offer of relief as confined to only six automated calls. (R. 25, Def.'s Reply at 2.) Westlake maintains that its offer for “each and every” call is not “an indefinite term” such that Scott can avoid the mooting of her claims. ( Id.) (quoting Damasco v. Clearwire Corp., No. 10–cv–3063, 2010 WL 3522950, at *3 (N.D.Ill. Sept. 2, 2010) (Zagel, J.), aff'd,662 F.3d 891 (7th Cir.2011)). Westlake argues that this case is governed by the Seventh Circuit's decision in Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir.2011), which Westlake asserts is “clear and binding” and “controlling in this case.” (R. 25, Def.'s Reply at 1, 3.)

This Court has federal-question jurisdiction to determine whether it has subject-matter jurisdiction over this private cause of action arising under the TCPA pursuant to 28 U.S.C. § 1331. (R. 6, Am. Compl. ¶ 2) (citing 28 U.S.C. § 1331). The Supreme Court in Mims v. Arrow Fin. Servs., LLC, –––U.S. ––––, ––––, 132 S.Ct. 740, 745, 753, 181 L.Ed.2d 881 (2012), resolving a split among the Circuits as to whether Congress granted State courts exclusive jurisdiction over private causes of action brought pursuant to the TCPA, ⁵ held

that federal and state courts have concurrent jurisdiction over private suits arising under the TCPA ... [and] that Congress did not deprive federal courts of federal-question jurisdiction over private TCPA suits.... Nothing in the text, structure, purpose, or legislative history of the TCPA calls for displacement of the federal-question jurisdiction U.S. district courts ordinarily have under 28 U.S.C. § 1331. In the absence of direction from Congress ... we apply the familiar default rule: Federal courts have § 1331 jurisdiction over claims that arise under federal law.

(Id.) (citing Mims, 132 S.Ct. at 751–53).

LEGAL STANDARD

A motion brought pursuant to Federal Rule of Civil Procedure 12(b)(1) raises the fundamental question of whether a federal district court has subject-matter jurisdiction over the action before it; thus, a motion pursuant to Rule 12(b)(1) asks a court to dismiss an action over which it allegedly lacks subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1); see, e.g., Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94–95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Subject-matter jurisdiction under Article III of the Constitution “goes to the fundamental institutional competence of the court.” McBee v. Delica Co., Ltd., 417 F.3d 107, 127 (1st Cir.2005). It is “fundamental that if a court is without...