Payne v. Progressive Financial Services, Inc.
748 F.3d 605
| 5th Cir. | 2014Background
- Payne sued Progressive for FDCPA, Texas DCPA, and Texas DTPA claims based on harassing calls and improper identification as a debt collector.
- Progressive served an unaccepted Rule 68 offer of judgment, offering $1,001 plus fees and costs as of the offer date, expiring in 14 days.
- Payne did not respond to the Rule 68 offer.
- The district court dismissed Payne’s FDCPA claims for lack of subject-matter jurisdiction, finding the offer moot and declined to exercise supplemental jurisdiction over state-law claims.
- Payne timely appealed, challenging mootness of her FDCPA claims and the district court’s use of Rule 12(b)(1) to address merits issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the incomplete Rule 68 offer moot Payne’s FDCPA claims? | Payne’s actual damages were not offered; live controversy remained. | Offer met all relief Payne was entitled to, so mootness applied. | Incomplete offer did not moot the claims; reverse and remand. |
| Is mootness a jurisdictional issue or merits issue? | Mootness defeats jurisdiction if no live controversy. | Mootness relates to merits, not jurisdiction. | Mootness is a merits issue; jurisdiction is not defeated by potential lack of success on the merits. |
| Is Rule 12(b)(1) proper to challenge the merits of a claim? | N/A (not explicit in brief). | Rule 12(b)(1) not proper for merits challenges; should raise merits-based challenges separately. | Merits-based challenges remain available; dismissal under Rule 12(b)(1) inappropriate for merits. |
Key Cases Cited
- Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) (live controversy and jurisdiction separate from merits; Rule 12(b)(1) not based on merit.)
- Chafin v. Chafin, 133 S. Ct. 1017 (2013) (monot world continues to require live controversy.)
- Bell v. Hood, 327 U.S. 678 (1946) (jurisdiction not defeated by merits potential.)
- Verizon Md., Inc. v. Pub. Serv. Comm’n of Md., 535 U.S. 635 (2008) (absence of a valid cause of action does not implicate subject-matter jurisdiction.)
- Hrivnak v. NCO Portfolio Mgmt., Inc., 719 F.3d 564 (6th Cir. 2013) (incomplete offer leaves a live controversy for relief.)
- Zinni v. ER Solutions, Inc., 692 F.3d 1162 (11th Cir. 2012) (incomplete offer does not render claim moot.)
- Weiss v. Regal Collections, 385 F.3d 337 (3d Cir. 2004) (complete relief generally moots the claim; unaccepted offers differ.)
- Warren v. Sessoms & Rogers, P.A., 676 F.3d 365 (4th Cir. 2012) (same principle regarding complete relief and mootness.)
- Diaz v. First Am. Home Buyers Prot. Corp., 732 F.3d 948 (9th Cir. 2013) (division among circuits on whether an unaccepted offer fully satisfying the claim moots it.)
- Gates v. Towery, 430 F.3d 429 (7th Cir. 2005) (reassignment of mootness and offer of judgment analysis.)