White v. Ally Fin. Inc.

• Decision Date: 15 January 2013
• Docket Number: Civil Action No. 2:12–cv–00384.
• Citation: 969 F.Supp.2d 451
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Sadie WHITE, et al., Plaintiffs, v. ALLY FINANCIAL INC., et al., Defendants.

969 F.Supp.2d 451

Sadie WHITE, et al., Plaintiffs,

v.ALLY FINANCIAL INC., et al., Defendants.

Civil Action No. 2:12–cv–00384.

United States District Court, S.D. West Virginia.

Jan. 15, 2013.

Brett Justice Preston, Dan R. Snuffer, Jr., Preston & Salango, John W. Barrett, Jonathan R. Marshall, Bailey & Glasser, L. Lee Javins, II, Bucci Bailey & Javins, Charleston, WV, for Plaintiffs.

Kristen Vickers Hammond, Robert P. Martin, Bailey & Wyant, Albert C. Dunn, Jr., Allen Kopet & Associates, David P. Cook, Jr., MacCorkle Lavender & Sweeney, Charleston, WV, Allison L. Cannizaro, Michael D. Alltmont, Sessions Fishman

Nathan & Israel, Metairie, LA, James K. Schultz, Sessions Fishman Nathan & Israel, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

JOSEPH R. GOODWIN, District Judge.

Pending before the court are defendant West Asset Management's Motion to Dismiss for Lack of Subject Matter Jurisdiction [Docket 24] and Motion to Stay [Docket 26]. These motions have been fully briefed by both parties and the matters are ripe for review. As discussed below, this court HOLDS today that an offer of judgment under Federal Rule of Civil Procedure 68 that affords a named plaintiff in a putative class action complete relief and is made prior to a motion for class certification does not moot the putative class action, as long as the motion for class certification is ultimately timely filed. The United States Supreme Court has held that a named plaintiff has an interest in obtaining a final decision on class certification, separate and distinct from his or her interest in obtaining a final decision on the merits, and sufficient for a federal court to maintain jurisdiction over the case. If such an interest exists, then it must exist at the time the named plaintiff files his or her class action complaint.

Accordingly, the defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction [Docket 24] is DENIED. Moreover, because the court FINDS that the factors set forth in Landis v. North Am. Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936) do not weigh in favor of granting a stay, the defendant's Motion to Stay [Docket 26] is also DENIED.

I. Background and Procedural History¹

This action arises out of the defendants' allegedly unlawful debt collection practices. In November 2006, Jessie Dale White (the “decedent”) purchased a vehicle, financed through GMAC, Inc., now Ally Financial, Inc. (“Ally”). The decedent passed away on September 3, 2008, and his wife, the plaintiff Sadie White, was appointed Administratrix of the Estate of Jessie D. White. Because the decedent was the sole accountholder for the loan on the vehicle, any debt would be owed solely by his estate. After the decedent's death, defendant Ally allegedly repossessed the vehicle and sold it, resulting in a deficiency balance of $7,200.45. Subsequently, Ally hired defendant West Asset Management, Inc. (“West”) to collect the debt. From July through December 2009, when Ally recalled the account, West allegedly placed 21 calls and sent 2 letters contacting the plaintiff directly.

On February 25, 2010, the plaintiff filed her original Complaint in the Circuit Court of Boone County, West Virginia. On January 11, 2012, the plaintiff filed her Second Amended Complaint, naming Ally and West as defendants and including for the first time class allegations against both defendants.² The Second Amended Complaint sets forth four class action counts: (1) violation of the West Virginia Consumer Credit and Protection Act (“WVCCPA”); (2) negligent and reckless misconduct; (3) the tort of outrage; and (4) unjust enrichment. In the class action counts, the plaintiff essentially alleges that both defendants contacted her, and all others similarly situated, directly rather than submitting claims for debts in the probate estates as required by law. The complaint also set forth a fifth individual count, alleging violations of the WVCCPA when the defendants communicated directly with the plaintiff regarding her husband's debt while she was represented by counsel. The defendants subsequently removed the case to this court.

On May 21, 2012, defendant West made an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure. West offered the plaintiff the maximum amount of statutory penalties available under the WVCCPA, plus attorneys' fees and costs. No recovery was offered for the plaintiff's claim for actual damages under the WVCCPA or for her other state law claims. The Rule 68 offer also failed to address the class claims. The plaintiff moved to strike the offer of judgment [Docket 15]. In its response, defendant West argued that the Rule 68 offer provided the plaintiff complete relief on her individual claims, and therefore the putative class action was moot. In the court's July 20, 2012 Memorandum Opinion and Order [Docket 21], I denied the plaintiff's motion to strike. I also found that the case was not moot because the offer failed to provide complete relief on the plaintiff's individual claims, but declined to address whether the putative class action would be moot if the offer did provide complete relief.

Now, the question that I declined to address previously has been raised again by defendant West in the instant motion to dismiss. In addition, defendant West has also filed a motion to stay this court's decision on its motion to dismiss, arguing that the United States Supreme Court has granted certiorari in a case that will affect this court's ruling on that motion. See Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d Cir.2011), cert. granted,––– U.S. ––––, 133 S.Ct. 26, 183 L.Ed.2d 674 (2012) (No. 11–1059).

II. The Defendant's Motion to Dismiss for Lack of Subject Matter Jurisdiction

The sole legal issue involved in the instant motion to dismiss is whether the defendant's Rule 68 offer of judgment for complete relief to the named plaintiff, before a motion for class certification has been filed, has the effect of rendering the putative class action against the defendant moot. ³ I HOLD today that such a case is not moot because if the named plaintiff has an interest in obtaining a final decision on the issue of class certification, as the Supreme Court has held, then such an interest would exist when the class complaint is filed.

The defendant argues that the plaintiff's case is moot because the defendant made an offer of judgment that satisfies the plaintiff's entire demand. (Mem. of Law in Supp. of Mot. to Dismiss for Lack of Subject Matter Jurisdiction [Docket 25], at 9). The plaintiff argues in response that an offer of judgment prior to the plaintiff moving for class certification does not moot the putative class action, as long as the motion for class certification is ultimately timely filed. (Pl.'s Resp. in Opp'n to West's Mot. to Dismiss [Docket 31], at 3).

Neither the United States Supreme Court nor the Fourth Circuit has issued any opinion directly addressing this particular scenario. Based on the applicable Supreme Court guidance, however, I believe that an offer of judgment under Federal Rule of Civil Procedure 68 that affords a named plaintiff in a putative class action complete relief and is made prior to a motion for class certification does not moot the putative class action. Accordingly, the defendant's motion to dismiss is DENIED.

A. Legal Standard—Motion to Dismiss for Lack of Subject Matter Jurisdiction

A motion to dismiss for lack of subject matter jurisdiction can be raised in two ways—upon the face of the complaint or upon the validity of the facts stated therein. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). In cases where the moving party contends “that a complaint simply fails to allege facts upon which subject matter jurisdiction can be based .... the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration.” Id.

In cases where the validity of the facts is being challenged, the burden falls on the party asserting jurisdiction to prove subject matter jurisdiction. Id. The district court applies the standard applicable to a motion for summary judgment, under which the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists. Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.1991). The moving party should prevail only if the material jurisdictional facts are not in dispute, and the moving party is entitled to prevail as a matter of law. Id.

Here, the material facts are not in dispute, and the only question is whether the defendant is entitled to prevail as a matter of law.

B. Rule 68 Offers of Judgment and Mootness in the Context of Class Actions—Supreme Court Guidance

The defendant's argument is based on the doctrine of mootness—whether there is still a live case or controversy before the court. Article III of the Constitution limits the court's jurisdiction to “actual, ongoing controversies.” Honig v. Doe, 484 U.S. 305, 317, 108 S.Ct. 592, 98 L.Ed.2d 686 (1988). The United States Supreme Court has described the mootness doctrine as “standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).” U.S. Parole Comm'n v. Geraghty, 445 U.S. 388, 397, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980) (internal quotation marks omitted). “[A] case is moot when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969); see also Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 763 (4th Cir.2011).

Federal Rule of Civil Procedure 68 provides: “At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing par...