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Mey v. North Am. Bancard, LLC

United States Court of Appeals for the Sixth Circuit

July 6, 2016, Filed

File Name: 16a0377n.06

Case No. 14-2574

Opinion

 [*333]  BOGGS, Circuit Judge. In January 2014, North American Bancard, LLC ("NAB"), a credit-card processing company, used an automatic dialing system to make a marketing call to Diana Mey's cell-phone number, in violation of the Telephone Consumer Protection Act of 1991 ("TCPA"), 47 U.S.C. § 227. Mey then brought a federal action against NAB, individually and on behalf of a proposed nationwide class of persons whom NAB had also autodialed without permission. The district court denied without prejudice Mey's motion for class certification, [**2]  citing the need to hold a scheduling conference. NAB then made an offer of judgment to Mey, in which it agreed to pay Mey's statutory damages and consented to her demand for injunctive relief. When Mey rejected the offer, NAB moved the court to enter judgment on her individual claims on the ground that the offer of judgment mooted Mey's claims. The district court agreed, entered judgment in favor of NAB on Mey's individual claims, and dismissed the class claims. Mey appealed, and we now reverse.

] In 1991, Congress enacted the TCPA, which outlaws unsolicited telephone calls  [*334]  made through an "automatic telephone dialing system" to any phone number that is assigned to a cellular telephone service. 47 U.S.C. § 227(b)(1)(A)(iii). In order to give that prohibition effect, Congress created a private right of action and authorized statutory damages of up to $1,500 for every violation of the TCPA. Id. § 227(b)(3)(B)—(C). Notwithstanding the potential damages liability, NAB allegedly used an automatic system to make thousands of calls to assigned cellphone numbers, including a January 21, 2014, call to Diana Mey. Just over two months after receiving NAB's marketing call, Mey filed this action on behalf of herself and a proposed nationwide class [**3]  of persons whom NAB had autodialed without consent, alleging that NAB had violated the TCPA. The complaint sought statutory damages for each violation of the TCPA, which would amount to between $500 and $1,500 per illegal call, as well as injunctive relief in the form of an order that NAB cease making calls in violation of the TCPA.

But Mey knew that her class action faced two hurdles: Federal Rule of Civil Procedure 68 and Article III of the federal Constitution. Rule 68 provides that "a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued." Fed. R. Civ. P. 68(a). If the opposing party accepts, "either party may then file the offer and notice of acceptance," and the "clerk must then enter judgment." Ibid. Rule 68 says little about the consequences of rejecting an offer of judgment, but we concluded that Article III does. ] Because Article III gives federal courts authority to decide only actual controversies, a federal court must dismiss a case as moot if the claimant "loses a personal stake in the action, making it 'impossible for the court to grant any effectual relief whatever.'" Hrivnak v. NCO Portfolio Mgmt., Inc., 719 F.3d 564, 567 (6th Cir. 2013) (quoting Church of Scientology v. United States, 506 U.S. 9, 12, 113 S. Ct. 447, 121 L. Ed. 2d 313 (1992)). Applying this principle, we explained that because a Rule 68 offer that "satisfies a plaintiff's entire demand" leaves no controversy for the [**4]  court to resolve, an unaccepted Rule 68 offer moots the plaintiff's claim. O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 574-75 (6th Cir. 2009). We held that when a plaintiff refuses such a favorable settlement, district courts should "enter judgment in favor of the plaintif[f] in accordance with the defendant['s] Rule 68 offer of judgment." Id. at 575.

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655 Fed. Appx. 332 *; 2016 U.S. App. LEXIS 12618 **; 2016 FED App. 0377N (6th Cir.); 2016 WL 3613395

DIANA MEY, Plaintiff-Appellant, v. NORTH AMERICAN BANCARD, LLC, Defendant-Appellee.

Notice: NOT RECOMMENDED FOR FULL-TEXT PUBLICATION. SIXTH CIRCUIT RULE 28 LIMITS CITATION TO SPECIFIC SITUATIONS. PLEASE SEE RULE 28 BEFORE CITING IN A PROCEEDING IN A COURT IN THE SIXTH CIRCUIT. IF CITED, A COPY MUST BE SERVED ON OTHER PARTIES AND THE COURT. THIS NOTICE IS TO BE PROMINENTLY DISPLAYED IF THIS DECISION IS REPRODUCED.

Prior History:  [**1] ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN.

Mey v. N. Am. Bancard, LLC, 2014 U.S. Dist. LEXIS 165453 ( E.D. Mich., Nov. 26, 2014)

CORE TERMS

moot, district court, individual claim, class claim, enter a judgment, class certification, injunction, unaccepted, telephone, damages

Business & Corporate Compliance, Communications Law, Federal Acts, Telephone Consumer Protection Act, Civil Procedure, Settlements, Offers of Judgment, Acceptances, Justiciability, Mootness, Real Controversy Requirement, Constitutional Law, The Judiciary, Case or Controversy, Mootness, Appeals, Standards of Review, Clearly Erroneous Review, Preliminary Considerations, Jurisdiction, Subject Matter Jurisdiction, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, De Novo Review, Rejection