Burr & Forman

07.11.2013   |   Blog Articles, Consumer Finance Litigation, FDCPA, Rule 68

Second Circuit Court of Appeals: Offer of Judgment in Open Court Moots FDCPA Claim

The Second Circuit Court of Appeal affirmed the dismissal of a Fair Debt Collection Practices Act (“FDCPA”) claim brought by a non-debtor under the mootness doctrine after an offer of judgment conveyed orally in open court was rejected. In Doyle v. Midland Credit Management, Inc. —- F. 3d —, 2013 WL 3242148 (2d Cir. June 28, 2013), the Second Circuit held that an offer of judgment need not comply with the offer of judgment rule in order to render a case moot. Doyle filed suit against Midland alleging that Midland had harassed him, failed to disclose Midland was a debt collector, and made improper third party disclosures during efforts to collect a debt. Midland removed the case to federal court, and moved for judgment on the pleadings. The District Court judge denied that motion. Midland then offered to settle the case for $1,001 in addition to Doyle’s reasonable attorney fees and costs. Midland then moved to dismiss the case under Rule 68 for lack of subject matter jurisdiction. Doyle stated that he was also suing for actual damages, in the amount of several dollars incurred by virtue of the calls being placed to his cell phone and appearing on his bill. Midland upped its offer to $1,001, $10 to cover the cost of the calls, and Doyle’s reasonable attorney’s fees and costs. Doyle’s counsel agreed that the settlement offer included all the relief that Doyle sought. Doyle none-the-less refused to settle. The District Court held that the case was moot and dismissed the action. Doyle appealed, asserting that the offers failed to comply with Rule 68 and, therefore, his case should not have been dismissed. In explaining the mootness doctrine, the Court of Appeals stated that “if a defendant consents to judgment in the maximum amount for which the defendant could be held liable, ‘there is no justification for taking the time of the court and the defendant in the pursuit of . . . claims which [the] defendant has more than satisfied.'” Doyle’s principal argument was that a Rule 68 offer cannot be made orally. The Second Circuit, in affirming the District Court’s dismissal, opined that “an offer need not comply with Federal Rule of Civil Procedure 68 in order to render a case moot under Article III.” The Second Circuit further held that “Doyle’s refusal to settle the case in return for Midland’s offer . . ., notwithstanding Doyle’s acknowledgment that he could win no more, was sufficient ground to dismiss this case for lack of subject matter jurisdiction.” For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.

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