RADHA GEISMANN, M.D., P.C., individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. ZOCDOC, INCORPORATED, Defendant-Appellee, JOHN DOES 1-10, Defendants.
Docket No. 17-2692
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
August Term, 2017 (Argued: May 14, 2018 Decided: November 27, 2018)
Before: SACK AND RAGGI, Circuit Judges, and GARDEPHE, District Judge.*
VACATED and REMANDED for further proceedings.
GLENN L. HARA (David M. Oppenheim, on the brief), Anderson + Wanca, Rolling Meadows, Illinois, for Plaintiff-Appellant.
BLAINE C. KIMREY (Charles J. Nerko, Vedder Price P.C., New York, New York, Bryan K. Clark, on the brief), Vedder Price P.C., Chicago, Illinois, for Defendant-Appellee.
Brian Melendez, Barnes & Thornburg LLP, Minneapolis, Minnesota, for Amicus Curiae ACA International, in support of Defendant-Appellee.
SACK, Circuit Judge:
Radha Geismann, M.D., P.C. (“Geismann“) filed a class action complaint against ZocDoc, Inc. (“ZocDoc“) in the United States District Court for the Southern District of New York, alleging that it1 received unsolicited telecopies (colloquially and hereinafter “faxes“) from ZocDoc in violation of the Telephone Consumer Protection Act (“TCPA“),
On remand, ZocDoc attempted to use another procedural rule to settle Geismann‘s individual claims: ZocDoc requested and obtained leave from the district court to deposit funds in the court‘s registry pursuant to
The Complaint
Geismann, a Missouri professional corporation, alleges that it reсeived from ZocDoc, a Delaware corporation, two unsolicited faxes advertising a “patient matching service” for doctors. See Corrected First Amended Class Action Complaint ¶¶ 8-9, at Joint Appendix (“J.A.“) 3 & Exhibits A and B to the Corrected First Amended Class Action Complaint, at J.A. 17–18. Both faxes stated, in a legend at the bottom of the fax, that if the recipient wished to “stop receiving faxes,” he or she could call the domestic telephone number provided. See Exhibits A and B to the Corrected First Amеnded Class Action Complaint, at J.A. 17–18.
In 2014, Geismann filed this putative class action against ZocDoc in Missouri state court, alleging that these faxes were unsolicited advertisements in violation of the TCPA,
On the same day that it filed its complaint in state court, Geismann filed a separate motion for class certification pursuant to Missouri law. Geismann defined the proposed class as “[a]ll persons who on or after four years prior to the filing of this action, were sent telephone facsimile messages of material advertising [a] patient matching service for doctors by or on behаlf of Defendant.” Radha Geismann, M.D., P.C. v. ZocDoc, Inc., No. 14-cv-7009 (S.D.N.Y.), ECF No. 5, at 2.
Geismann I Proceedings in the District Court
After the case was transferred to the Southern District of New York, ZocDoc moved to dismiss the complaint, primarily on the ground that its offer of judgment provided full satisfaction of Geismann‘s claim, so the action was moot.
Geismann timely appealed.
Geismann II
On January 20, 2016, after we held oral argument but before we issued a decision, the Supreme Court handed down its decision in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). Campbell-Ewald‘s procedural posture was similar to the Geismann I appeal then before us: The plaintiff filed a putative TCPA class action and the defendant made a Rule 68 offer of judgment to satisfy the plaintiff‘s individual claims, which the plaintiff rejected. Id. at 667–68. The Supreme Court decided that the defendant‘s unaccepted Rule 68 offer did not
On February 1, 2016, while Geismann‘s appeal in Geismann II remained pending and after the Supreme Court issued its decisiоn in Campbell-Ewald, ZocDoc filed a motion with the district court seeking to deposit a check in the amount of $6,100 payable to the clerk of the district court in satisfaction of
On March 9, 2017, we decided Geismann‘s appeal. See Geismann II, 850 F.3d 507. We vacated the district court‘s judgment and remanded the case for further proceedings. We concluded that “[i]n light of Campbell-Ewald, the district court‘s conclusion in this case that Geismann‘s claim was ‘mooted by the amount and content of the Rule 68 offer made by ZocDoc’ [was] incorrect.” Id. at 512 (quoting Geismann I, 60 F. Supp. 3d at 407). We explained that, notwithstanding ZocDoc‘s post-judgment deposit with the district court, the case did not “match[] the hypothetical posed by Campbell-Ewald,” reasoning that because ZocDoc‘s rejected offer of settlement had “no continuing efficacy,” the deposit was made “pursuant to and in furtherance of a judgment that should not have been entered in the first place.” Id. at 512, 514 (internal quotation marks omitted). We declined to say whether judgment entered on the basis of a deposit would be permissible. See id. at 514–15 & n.16. We further determined that Geismann‘s class claim should not have been dismissed because its individual claim
Geismann III Proceedings in the District Court
On April 26, 2017, ZocDoc filed a letter motion with the district court seeking leave to deposit an additional $13,900 with the court under
On July 28, 2017, the district court granted ZocDoc leave to deposit under Rule 67 and to file a motion for summary judgment. See Geismann III, 268 F. Supp. 3d at 601. The district сourt reasoned that “[t]here is a consequential difference between on the one hand a defendant‘s offer of an adequate amount in an offer of judgment whose utility depends on its being timely accepted under principles of contract and
On August 25, 2017, ZocDoc filed a motion for summary judgment, arguing that its deposit and acquiescence to injunctive relief had made Geismann‘s claim moot and that the district court should therefore enter judgment in Geismann‘s favor. Radha Geismann, M.D., P.C. v. ZocDoc, Inc., No. 14-cv-7009, ECF No. 77, at 1–4 (“Geismann lacks standing because ZocDoc has
On September 25, 2017, the district court issued a two-page judgment granting ZocDoc‘s motion for summary judgment in favor of Geismann. The court ordered that, “[p]ursuant to this Court‘s Opinion and Order dated July 28, 2017,” Geismann “shall recover from defendant ZocDoc, Inc. the sum of Twenty Thousand Dollars,” and that ZocDoc is “enjoined, restrained, and forbidden from sending to plaintiff any faxes of any nature without express written prior approval from Plaintiff.” Judgment at 1, J.A. 108. The district court further ordered thаt Geismann‘s motion for class certification and “all claims asserted on behalf of a purported class, are dismissed without prejudice for [Geismann‘s] lack of standing to represent or belong to the class.” Id. at 2, J.A. 109. The district court directed the clerk to mail a check to the plaintiff in the amount due and to close the case. This timely appeal followed.5
On appeal, Geismann challenges the district court‘s orders insofar as they permitted ZocDoc to dеposit funds pursuant to Rule 67, granted ZocDoc‘s motion for summary judgment, and dismissed Geismann‘s motion for class certification. As noted above, the district court based all three decisions on its conclusion that ZocDoc‘s Rule 67 deposit rendered Geismann‘s action moot. The focus of our analysis is on whether that conclusion was correct.
We begin with the Supreme Court‘s decision in Campbell-Ewald. The question before it was whether “an unaccepted offer to satisfy the named plaintiff‘s individual claim [is] sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated.” 136 S. Ct. at 666. As the Seventh Circuit later observed, “nothing in this question [was] necessarily limited to a settlement offer presented pursuant to
Moreover, a key factor underlying the Supreme Court‘s holding in Campbell-Ewald was that thе plaintiff “remained emptyhanded” once the defendant‘s Rule 68 settlement offer expired. 136 S. Ct. at 672. An unaccepted offer provides a plaintiff “no entitlement . . . to relief,” so “the parties remained adverse; both retained the same stake in the litigation they had at the outset.” Id. at 670–71. In other words, “a lawsuit—or an individual claim—becomes moot when a plaintiff actually receives all of the relief he or she could receive on the claim through further litigation.” Chen v. Allstate Ins. Co., 819 F.3d 1136, 1144 (9th Cir. 2016) (emphasis in original); see also Gibson v. Brooks, 175 F. App‘x 491, 491 (2d Cir. 2006) (summary order) (“Because the only relief sought by рlaintiff is a remand for a new trial, and because plaintiff has already received the benefit of a
The deposit of funds in the district court registry, without more, leaves a plaintiff “emptyhanded” because the deposit alone does not provide relief to him or her. “The Rule 67 procedure provides a place of safekeeping for disputed funds pending the resolution of a legal dispute, but it cannot be used as a means of altering the contractual relationships and legal duties of the parties.” LTV Corp. v. Gulf States Steel, Inc. of Ala., 969 F.2d 1050, 1063 (D.C. Cir. 1992); see also Alstom Caribe, Inc. v. George P. Reintjes Co., 484 F.3d 106, 113 (1st Cir. 2007) (“The core purpose of Rule 67 is to relieve a party who holds a contested fund from responsibility for disbursement of that fund among those claiming some entitlement thereto.“). Indeed, on its face, Rule 67 “is just a procedural mechanism that allows a party to use the court as an escrow agent.” Fulton Dental, 860 F.3d at 544. It does not itself determine who is entitled to the money.
Rule 67 explicitly permits a party to deposit money “whether or not that party claims any of it” and directs that the funds be held in accordance with other statutory provisions,
In short, the Rule 67 procedure “is nothing like a bank account in the plaintiff‘s name—that is, an account in which the plaintiff has а right at any time to withdraw funds.” Fulton Dental, 860 F.3d at 545; cf. Campbell-Ewald, 136 S. Ct. at 672 (leaving open hypothetical where defendant deposits full amount “in an account payable to plaintiff” (emphasis added)). By itself, then, ZocDoc‘s deposit of funds cannot be considered to have rendered Geismann‘s individual claims moot.
We also doubt that mootness is the correct legal concept to employ in analyzing the effect of ZocDoc‘s Rule 67 deposit. “A case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party.” Knox v. Serv. Emps. Int‘l Union, Local 1000, 567 U.S. 298, 307 (2012) (internal quotation marks omitted). By this standard, ZocDoc‘s Rule 67 deposit, by itself, could not have rendered Geismann‘s action moot. Geismann began this suit seeking damages and an injunction; after ZocDoc‘s deposit, Geismann had not yet “actually receive[d]” any funds, and although ZocDoc
While Rule 67 itself does not affect the vitality of a plaintiff‘s claims, those claims may of course become moot in other ways. Our decisions appear to recognize that where a defendant surrenders to “complete relief” in satisfaction of a plaintiff‘s claims, the district court may enter default judgment against the
That is the case here. Even if the district court first entered judgmеnt—enjoining ZocDoc from further faxes and directing the clerk of court to send Geismann a check for $20,000—and thereafter deemed Geismann‘s claims moot, that resolution would not have afforded Geismann complete relief. By rejecting the settlement offer and returning the clerk‘s check, Geismann effectively stated that its suit “is about more than the statutory damages to which it believes it is entitled; it is also about the additional reward that it hopes to earn by serving as the lead plaintiff for a class action. Nothing forces it to accept [ZocDoc‘s] valuation of the latter part of the case.” Fulton Dental, 860 F.3d at 545. Indeed, as Campbell-Ewald states, “a would-be class representative with a live claim of [its]
We therefore conclude that the district court must resolve the pending motion for class certification before entering judgment and declaring an action moot based solely on relief provided to a plaintiff on an individual basis. If the mоtion is granted,7 the class action may proceed. A conclusion otherwise would risk placing the defendant in control of a putative class action, effectively allowing the use of tactical procedural maneuvers to thwart class litigation at will. See Roper, 445 U.S. at 339 (“Requiring multiple plaintiffs to bring separate actions, which effectively could be ‘picked off’ by a defendant‘s tender of judgment before an affirmative ruling on class certification could be obtained, obviously would frustrаte the objectives of class actions[.]“).
For these reasons, we conclude that ZocDoc‘s Rule 67 deposit did not provide Geismann with an entitlement to complete relief and therefore did not render its TCPA claim moot. The district court should not have entered judgment based on ZocDoc‘s deposit, nor should it have dismissed Geismann‘s
CONCLUSION
We have considered the parties’ remaining arguments on appeal and find them to be without merit. For the foregoing reasons, we VACATE the judgment of the district court and REMAND for further proceedings.