Lary v. Rexall Sundown, Inc.
74 F. Supp. 3d 540
E.D.N.Y2015Background
- Plaintiff John H. Lary, Jr. sued under the TCPA/JFPA alleging receipt of an unsolicited advertising fax (no opt-out notice) and sought class certification for recipients over the four years prior to the FAC.
- CCG Marketing Solutions (CCG) was added as a defendant; CCG created/arranged the fax transmission and paid a third-party broadcaster.
- Before class certification was decided, CCG served Lary with a Rule 68 offer consenting to judgment covering the relief he sought (ultimate consent to $10,500; initial $3,500 offer noted).
- CCG moved to dismiss under Rule 12(b)(1) (construed as a 12(h)(3) lack of jurisdiction challenge) arguing the unaccepted pre-certification Rule 68 offer mooted Lary’s individual claim.
- Lary moved for class certification; the court concluded his individual claim was mooted by CCG’s offer and denied class certification as there was no live Article III controversy.
- Court entered judgment for Lary individually ($6,000 statutory damages) and dismissed for lack of subject matter jurisdiction; supplemental claims dismissed without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does an unaccepted pre-certification Rule 68 offer moot the named plaintiff's individual TCPA claim and hence the putative class action? | Lary: an unaccepted Rule 68 cannot moot the case under Second Circuit precedent; he retains a continuing interest to pursue class relief. | CCG: its Rule 68 offer fully satisfied Lary’s individual claim, removing his personal stake and rendering the action moot. | Held: The offer mooted Lary’s individual claim; without a live claim class certification cannot proceed, so dismissal for lack of jurisdiction is appropriate. |
| Did CCG forfeit its jurisdictional challenge by previously answering? | Lary: CCG waived right to challenge via motion after answering. | CCG: court may raise/decide subject-matter jurisdiction at any time under Rule 12(h)(3). | Held: Court treated the motion under Rule 12(h)(3) and reached jurisdictional question; no forfeiture. |
| Whether Lary retained any interest to represent putative class after individual claim satisfaction | Lary: continuing interest in class relief and timely filing of certification motion. | CCG: absent certification, unnamed class members are not parties; individual claim must remain live for Rule 23. | Held: Under Second Circuit and Supreme Court precedent, if the named plaintiff’s claim is mooted before certification, the class action is moot. |
| Does the TCPA’s damages/treble-damages structure or lack of fee-shifting alter the relation-back/pick-off analysis? | Lary: offer did not cover full statutory damages/treble; class considerations remain. | CCG: offer consented to judgment for all relief plaintiff could obtain; TCPA’s lack of fee-shifting makes pick-off concerns less compelling. | Held: The court found CCG’s offer provided all relief Lary could obtain and emphasized TCPA has no fee-shifting, supporting dismissal. |
Key Cases Cited
- Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326 (1980) (discusses defendant "picking off" named plaintiffs with offers of judgment and appeals rights)
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (collective-action/Article III mootness when individual claim is satisfied; relation-back/inherently transitory discussion)
- Abrams v. Interco, Inc., 719 F.2d 23 (2d Cir. 1983) (pre-certification offer that satisfies individual relief can render action moot)
- McCauley v. Trans Union, L.L.C., 402 F.3d 340 (2d Cir. 2005) (unaccepted offer does not automatically moot case; where offer resolves everything, court should enter judgment)
- Doyle v. Midland Credit Mgmt., Inc., 722 F.3d 78 (2d Cir. 2013) (an offer that fully satisfies plaintiff’s claims can moot the case even if not a formal Rule 68 offer)
- Cabala v. Crowley, 736 F.3d 226 (2d Cir. 2013) (distinguishes informal settlements from offers of judgment; where offer resolves all disputes, court may enter judgment)
- Comer v. Cisneros, 37 F.3d 775 (2d Cir. 1994) (if named plaintiff’s claim becomes moot before certification, the entire class action generally becomes moot)