BOSTON (Legal Newsline) - The defendant in a class action lawsuit alleging it sent a single “junk” fax to a New Jersey-based chiropractic center, in violation of federal law, again is asking a Massachusetts federal court to stay and have a federal appellate court review the case.
Cayan LLC d/b/a Capital Bankcard filed its renewed motion for certification of an interlocutory appeal and stay of proceedings with the U.S. District Court for the District of Massachusetts June 15.
The company argues that “cutting-edge” questions remain following the U.S. Supreme Court’s opinion in Campbell-Ewald Co. v. Gomez.
In January, the nation’s highest court said an unaccepted offer of complete relief to a named plaintiff in a class action lawsuit does not moot the plaintiff’s claim.
Cayan contends there is a “substantial difference of opinion” on the application of the “inherently transitory” exception to mootness in a class action context.
“Defendants believe that at least nine judges, including five Justices of the Supreme Court, would have ruled differently in this case given their formulations and application of relevant mootness exceptions,” the company wrote in its June 20 memorandum, filed in support of its motion.
“Further, there is no clear authority addressing the precise scenario here where the named plaintiff in a Fed. R. Civ. Proc. 23 class action no longer has a live claim and the class has been offered injunctive relief that ‘has contempt bite to it.’”
Cayan argues that both parties, including plaintiff South Orange Chiropractic Center LLC, would “benefit greatly” from some “much-needed clarity” provided by the U.S. Court of Appeals for the First Circuit and possibly the Supreme Court.
A stay also is necessary, the company argues, because the parties should not have to engage in “expensive class and merits discovery” given the threshold jurisdictional issues presented.
“Nor is there any prejudice to Plaintiff in staying this case to allow for an interlocutory appeal,” Cayan added in its 19-page memorandum.
The Massachusetts federal court, in an April order, considered two legal questions left unresolved by the Supreme Court.
First, whether the plaintiff’s individual claims were mooted by Cayan’s tender of complete relief. The federal court ruled that South Orange no longer had a live claim.
The second, “harder issue” was whether the class claims remained justiciable where the defendant offered class-wide injunctive relief and only class-wide statutory damages remained.
On this question, the federal court held that even though South Orange’s individual claims have become moot, the class action may proceed as a case or controversy under Article III as its “request for class-wide statutory damages falls within the ‘inherently transitory’ exception discussed by the First Circuit in Cruz v. Farquharson because the class issues will likely evade review.”
Cayan wants appellate review of the second, “harder” question.
In its April order, the federal court recognized that an interlocutory appeal and a stay may make sense, and invited the parties to brief the issue of whether such an appeal would be appropriate.
Cayan subsequently moved for an order certifying the court’s order for interlocutory appeal to resolve the following question:
“Does the ‘inherently transitory’ exception to mootness apply to a request for monetary damages for absent class members where the plaintiff’s individual claim is moot and injunctive relief has been offered to the class?”
The federal court agreed that the question “of whether a class action remains justiciable after a defendant’s attempt to ‘pick off’ the named plaintiff” is a controlling question of law, the resolution of which would materially advance the ultimate termination of the litigation.
But finding no clear split in authority on whether a putative class action is mooted following a tender of complete relief to the named plaintiff, the court, in a separate May order, determined that interlocutory appeal was not warranted.
The court invited Cayan to renew its motion to present a split in the case law demonstrating a basis for differing opinions.
The plaintiff, South Orange, argues in its June 29 opposition to Cayan’s renewed motion that the defendant is merely seeking to “take a proverbial ‘second bite at the apple’” without offering the federal court any justification for doing so other than the company’s “disagreement” with the court’s decision.
“Defendant does not provide a proper basis for a motion for reconsideration, nor does Defendant cite a single case decided since this Court’s prior resolution of this issue,” South Orange wrote.
South Orange filed the putative class action in August 2015, alleging that Cayan sent it one fax advertisement in violation of the Telephone Consumer Protection Act.
The TCPA restricts telephone solicitations, i.e. telemarketing, and the use of automated telephone equipment.
In particular, the law limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines. It also specifies several technical requirements for fax machines, autodialers and voice messaging systems -- principally with provisions requiring identification and contact information of the entity using the device to be contained in the message.
Generally, the act makes it unlawful “to initiate 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” except in emergencies or in circumstances exempted by the Federal Communications Commission.
The law permits any “person or entity” to bring an action to enjoin violations of the statute and/or recover actual damages or statutory damages ranging from $500 to $1,500 per violation.
In December 2015, Cayan served South Orange an offer of judgment under Federal Rule of Civil Procedure 68, as well as a settlement offer.
In particular, Cayan offered: (1) to have judgment entered against it, (2) to stipulate to the injunctive relief the plaintiff requested in its prayer for relief, (3) to pay for any costs that are recoverable in this case, (4) to preserve evidence, as requested in the complaint and (5) to pay the plaintiff more than the $1,500 maximum statutory damages available under the TCPA for the single fax at issue.
More specifically, Cayan offered South Orange $7,500, plus recoverable costs, which was delivered in the form of a bank check.
Despite an offer worth multiples of the maximum statutory damages the plaintiff could recover, South Orange rejected it.
In January, Cayan moved to dismiss the case for lack of subject matter jurisdiction based on the tender of complete relief.
Before South Orange responded to the defendant’s motion to dismiss, the Supreme Court decided Gomez.
Soon after the high court’s decision, Cayan requested that it be allowed to deposit $7,500 with the Massachusetts federal court if the $7,500 tender in the form of a bank check delivered to the plaintiff was deemed insufficient.
Then, after hearing argument on Cayan’s motion to dismiss in February, the federal court issued its order denying the motion on April 12.
While it acknowledged that the plaintiff “no longer has the requisite ‘live claim’” because Cayan offered to deposit a check with the court and satisfy all of South Orange’s individual claims, the court said the class action may proceed.
There’s no doubt that the federal court is aware of the case’s significance in light of Gomez.
At oral argument on the motion to dismiss and in its order denying the motion, it recognized that “while one might think of this as a case about one little fax, it’s actually a very important case in the area of class action litigation more generally.”
The court also noted, at the start of oral arguments, that the parties were “carving new ground.”
As of Thursday, Judge Patti B. Saris, who is overseeing the case, had not ruled on Cayan’s renewed motion.
From Legal Newsline: Reach Jessica Karmasek by email at firstname.lastname@example.org.