Todd C. Bank v. Spark Energy Holdings, LLC
| Decision Date | 20 June 2014 |
| Docket Number | 13-CV-6130 (ARR) (LB) |
| Parties | TODD C. BANK, Plaintiff, v. SPARK ENERGY HOLDINGS, LLC, SPARK ENERGY, L.P., and SPARK ENERGY GAS, LP, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
NOT FOR ELECTRONIC
OR PRINT PUBLICATION
Plaintiff Todd C. Bank, an attorney proceeding pro se, brings this individual and putative class action against defendants Spark Energy Holdings, LLC, Spark Energy, L.P., and Spark Energy Gas, LP (collectively, "Spark Energy"). Plaintiff asserts claims under the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, and New York state law.
Now before the court is defendants' motion to dismiss plaintiff's TCPA claims pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Defendants argue that plaintiff's TCPA claims were previously litigated and dismissed in a suit in the Southern District of Texas, and therefore the principles of res judicata and collateral estoppel require the dismissal of plaintiff's TCPA claims in this suit. Plaintiff opposes the motion and seeks leave to move for class certification.
For the reasons set forth below, defendants' motion to dismiss is denied, and plaintiff is granted leave to move for class certification.
Plaintiff filed this complaint on November 4, 2013, alleging that defendants "have made, or authorized to be made, thousands of unsolicited telemarketing calls to residential telephone lines" to advertise their gas- and electric-billing services. Compl., Dkt. #1, ¶ 1. Plaintiff asserts that he received one of these unsolicited telemarketing calls to his New York telephone number on October 4, 2011. Id. ¶¶ 13-14.
Plaintiff alleges that the calls violated the TCPA's prohibition on "initiat[ing] any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party." 47 U.S.C. § 227(b)(1)(B). He asserts TCPA claims individually and on behalf of a class of all individuals who received one or more of these calls during the four-year period prior to the commencement of this action. Compl. ¶¶ 3, 21-24. Plaintiff also alleges that the calls violated a New York state law requiring that all calls made through an automatic-dialing-announcing device disclose the name, address, and telephone number of the person on whose behalf the calls are transmitted. N.Y. Gen. Bus. Law § 399-p(3)(a); Compl. ¶¶ 19-20. Plaintiff asserts New York state law claims individually and on behalf of a class of all individuals who received one or more of these calls on a New York telephone number during the three-year period prior to the commencement of this action. Compl. ¶¶ 4, 25-28. Plaintiff seeks statutory damages, injunctive relief, attorney's fees, and costs.
Plaintiff previously brought a suit in the Southern District of Texas asserting TCPA claims against the same defendants. See Bank v. Spark Energy Holdings LLC, 4:11-CV-4082 (S.D. Tex.). Plaintiff's suit in Texas, filed on November 21, 2011, challenged the same unsolicited telemarketing call to his telephone line on October 4, 2011, and asserted TCPA claims on behalf of himself and a class of individuals who had received similar calls. Decl. ofBenjamin D. Pergament ("Pergament Decl."), Dkt. #17, Ex. 1. On May 10, 2013, defendants made an offer of judgment to plaintiff pursuant to Federal Rule of Civil Procedure 68. Pergament Decl., Ex. 2. On May 15, 2013, plaintiff notified defendants by e-mail that he declined to accept the offer. Pergament Decl., Ex. 3.
On October 18, 2013, the district court in Texas dismissed plaintiff's suit on mootness grounds. Pergament Decl., Ex. 4. The court stated that, under Fifth Circuit law, if a defendant makes a Rule 68 offer that would provide the plaintiff with complete relief, the offer renders the plaintiff's claim moot because he no longer has a personal stake in the outcome of the litigation. Id. at 4 (citing Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 921 n.5 (5th Cir. 2008)). In opposing dismissal, plaintiff did not dispute that defendants' Rule 68 offer would have provided full satisfaction of his individual claim. Id. at 15. The Texas court had to address whether plaintiff's suit could nevertheless go forward because he also asserted a class action claim.
The court noted the "well settled" principle that a class action does not become moot if the named plaintiff's individual claim becomes moot after the court has certified a class. Id. at 12. Fifth Circuit law also allowed a class action to go forward as long as a timely filed motion for class certification was pending when the named plaintiff's individual claim became moot, even if the class had not yet been certified. Id. at 13. In plaintiff's case, however, almost two years after the commencement of the action, a class had not been certified and no motion for certification was pending. Instead, plaintiff had filed a motion seeking an extension of time to move for class certification. Id. at 15. Under the general Fifth Circuit rule, if a defendant makes "a Rule 68 offer that satisfies the entirety of a named plaintiff's claims, where no class has been certified, and where no exceptions apply, both the named plaintiff's claims and the class action become moot." Id. at 5 (citing Murray v. Fid. Nat'l Fin., Inc., 594 F.3d 419, 421 (5th Cir. 2010)).
Plaintiff argued that an exception should apply in his case. In the analogous context of Fair Labor Standards Act ("FLSA") collective actions, the Fifth Circuit recognized certain situations where a motion for class certification could relate back to the date of the filing of the complaint. Id. at 16 (citing Sandoz, 553 F.3d at 919-20). This exception was designed to prevent defendants from avoiding a collective action by quickly tendering Rule 68 offers to the named plaintiffs, mooting their individual claims and thereby rendering the collective action moot before the plaintiffs had a chance to certify the class. Id. Plaintiff argued that, if the court granted his motion for an extension of time to move for class certification, his anticipated motion would relate back to the filing of his complaint and precede defendants' Rule 68 offer. Id. at 21.
The district court in Texas held that plaintiff could not benefit from the relation back exception. Even if the rule could be invoked in Rule 23 class actions as well as FLSA collective actions, it only applied when the plaintiff diligently pursued class certification in a timely manner but did not have the opportunity to move for certification before the defendant made a Rule 68 offer. Id. at 16-17. In the Texas case, defendants had waited eighteen months to make a Rule 68 offer. Id. at 17. Plaintiff had never moved for class certification during that period and had not yet identified a single class member. Id. at 17. The district court found that plaintiff had not "diligently pursued certification" and could not invoke the relation back exception. Id. at 21.
Therefore, the district court held that the general Fifth Circuit rule applied to plaintiff's case. Since plaintiff rejected a Rule 68 offer that would have satisfied the entirety of his individual claim, and since no class had been certified and no motion for certification had been filed, both plaintiff's individual claim and the class action became moot. Id. at 22. The court lacked subject matter jurisdiction over the action because all of the claims were moot. Id. The court issued a Final Judgment dismissing plaintiff's claims "with prejudice in their entirety."Pergament Decl., Ex. 5.
Based on the dismissal of plaintiff's TCPA claims in the Texas suit, defendants now move to dismiss plaintiff's TCPA claims in this action on the grounds of res judicata and collateral estoppel. Dkt. #14.
"Res judicata challenges may properly be raised via a motion to dismiss for failure to state a claim under Rule 12(b)(6)." Thompson v. Cnty. of Franklin, 15 F.3d 245, 253 (2d Cir. 1994). Dismissal on res judicata grounds is appropriate if "it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law." Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 86 (2d Cir. 2000).
Defendants argue that the Southern District of Texas ruling should have preclusive effect in this action and requires dismissal of plaintiff's TCPA claims. "The preclusive effect of a federal-court judgment is determined by federal common law." Taylor v. Sturgell, 553 U.S. 880, 891 (2008). The federal common law doctrine of res judicata incorporates two separate types of preclusion: claim preclusion and issue preclusion. Id. at 892. "Under the doctrine of claim preclusion, a final judgment forecloses 'successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit.'" Id. (quoting New Hampshire v. Maine, 532 U.S. 742, 748 (2001)). By contrast, under the doctrine of issue preclusion, also referred to as collateral estoppel, "an issue of fact or law, actually litigated and resolved by a valid final judgment, binds the parties in a subsequent action, whether on the same or a different claim." Baker by Thomas v. Gen. Motors Corp., 522 U.S. 222, 233 n.5 (1998).
In order for claim preclusion to bar a later suit, the prior decision must have been "(1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action." EDP Med. Computer Sys., Inc. v. United States, 480 F.3d 621, 624 (2d Cir. 2007) (quoting In re Teltronics Servs., Inc., 762 F.2d 185, 190 (2d Cir. 1985)).
In this case, defendants cannot satisfy the first requirement to invoke claim preclusion because the Southern District of Texas court dismissed plaintiff's TCPA claims on jurisdictional...
To continue reading
Request your trial