Illinois Court Holds Rule 67 Motion to Deposit Funds Moots Individual and Class TCPA Claims

Fulton Dental, LLC v. Bisco, Inc., No. 15-c-11038 (N.D. Ill. Sept. 2, 2016).

Plaintiff dental practice filed a class action lawsuit relating to a fax it received, contending that the fax violated the TCPA. Defendant made a settlement offer of $3,005 plus costs, which Plaintiff rejected. The next day, Defendant moved to deposit $3,600 with the Court under Rule 67, taking the position that $3,600 exceeded what Plaintiff could ever hope to recover because it assumed maximum liability: (1) $3,005 for two willful violations of the TCPA- one for sending the unwanted fax, and one for failing to include an opt-out notice; and (2) $595 to cover costs. Defendant also asked the Court to enter judgment in Plaintiff's favor for $3,005, enjoin Defendant from further activity that violates the TCPA and direct Plaintiff to file a bill of costs. Noting Defendant's unconditional surrender had a purpose - trying to moot the case so class claims cannot proceed- the Court also noted that Plaintiff could have thwarted Defendant's gambit by filing an early motion for class certification. It then analyzed: (1) Whether the Rule 67 deposit was proper; and (2) Whether the deposit mooted Plaintiff's individual and class claims.

Initially addressing whether Defendant could deposit funds under Rule 67, the Court analyzed the history of the Rule, pointing out that the 1983 amendments to the Rule clarified that deposits should be allowed even where a defendant wishes to tender money to satisfy a plaintiff's claim despite maintaining that she does not legally owe the sum. The Court also noted that few standards govern a court's discretion to grant Rule 67 deposits.

Granting the Motion to Deposit, the Court also rejected Plaintiff's Campbell-Ewald argument that a would-be class representative with a live claim must be accorded a fair opportunity to show that certification is warranted. In doing so, the Court initially noted that Campbell-Ewald dealt with an unaccepted or lapsed settlement offer under Rule 68, stating that unaccepted offers of judgment are deemed withdrawn and adding that "[s]ome courts agree [ ] a tender of full relief in the form of a Rule 67 deposit moots the individual's claims, because the 'Defendant has already fallen on its sword in unconditional surrender.'" Thus, there is a difference between a tender - "an unconditional offer and an actual production of money to be paid - and a Rule 68 "offer to tender payment in the future."

In concluding that Plaintiff was accorded complete relief, the Court also rejected Plaintiff's argument that while the proposed $3,600 deposit provided more than Plaintiff's maximum statutory recovery, the tender was insufficient because Plaintiff requested declaratory relief that Defendant's faxes violated the law. Relying on Seventh Circuit precedent, the Court stated that when a plaintiff has received full monetary (or injunctive) relief, the desire to obtain additional declaratory relief, without more, does not provide a strong enough personal stake in the Article III sense to allow the plaintiff to keep litigating: "'A winning party cannot appeal merely because the court that gave him his victory did not say things that he would have liked to hear, such as that his opponent is a lawbreaker. Adverse dicta are not appealable rulings.'" Equally unconvincing was Plaintiff's argument that Defendant's tender failed to provide complete relief because "[its] offer to enter into an injunction came as a part [Defendant's] Rule 68 'offer of judgment,' which was issued on January 18, 2016, and expired February 1, 2016.'" The Court noted that here, Defendant was asking the Court to enter an immediate injunction against it, adding that it would be splitting hairs to argue Defendant is offer to stop violating the TCPA as soon as the deposit is allowed, but not before then. "So this situation can be analogized to voluntary-cessation cases, where plaintiff's injunctive relief claim is mooted by defendant's change of behavior," and "no one reasonably expects that [Defendant] will send more unsolicited faxes to [Plaintiff]. [Defendant] has backed up its tender with unconditional and immediate action," asking the Court to "deposit $3,600 and enter judgment against it." For these reasons, the Court concluded that Plaintiff had no remaining personal stake in the litigation after receiving maximum statutory damages, injunctive relief, costs, and judgment in its favor.

The sole remaining question before the Court was whether the fact Plaintiff had no remaining claims mooted the class claims. Addressing this issue, the Court recognized that the case law reveals two situations where the mooting of named a plaintiff's individual claims does not moot the class claims: (1) when a class has been certified (or when a plaintiff has filed a motion for class certification); and (2) when the claims are inherently transitory or capable of repetition. With respect to the first situation, the Court noted there "is room to debate whether it makes sense to draw a mootness line at the filing of a motion for class certification," and "there is no real difference in the named plaintiff's personal stake in the litigation, or the existence of a live claim between proposed class members and defendants, on the date before a class certification motion is filed compared to the day thereafter," but Seventh Circuit precedent is clear that the filing of a motion for class certification is a key procedural step on which mootness of the class claims turns.

Concluding the claims were not inherently transitory, the Court stated "'[t]his controversy is not one of those situations, such as a pregnancy or an election campaign that will run its course faster than courts can usually act to provide complete review on the merits." The purpose of the exception is to allow an opportunity to decide claims that are fleetingly live. Also unavailing was any argument Plaintiff's claims were capable of repetition because for the exception to apply, a plaintiff must have a reasonable expectation of being subjected to the offending behavior in the future. Here, it was only speculative that Plaintiff, who received only one junk fax, would continue to receive them from Plaintiff in the future.

In conclusion, the Court allowed Defendant 5 days to deposit funds, after which time it would order funds be released to Plaintiff, stating that a judgment would be entered in Plaintiff's favor in the amount of $3,005, along with an injunction against Defendant to refrain from using any devise to send an unsolicited facsimile advertisement to Plaintiff in violation of the TCPA. The Court also required Plaintiff to file a bill of costs.

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