Court Denies J.C. Penney Co. Motion to Dismiss TCPA Suit
A proposed class action lawsuit against J.C. Penny Co. Inc. over spam text messages will continue after a California federal judge rejected J.C. Penny’s attempt to use an offer of judgment to moot the lawsuit.
Plaintiff Tracy Maier sued J.C. Penny Co. in January 2013 for violations of the Telephone Consumer Protection Act (TCPA). Maier had received unsolicited text messages from the retailer after signing up for J.C. Penney’s online rewards program and providing her cellphone number in the process. The text messages she received were generic text messages about sales and other events, which are typically sent via an automated telephone dialing system (in violation of the TCPA). In response to the complaint, J.C. Penney made an offer of judgment to Maier under Federal Rule of Civil Procedure 68 (Rule 68) for complete relief on her individual claims, which she denied.
Rule 68 is designed to encourage settlement. It provides that if a plaintiff rejects an offer of judgment, he or she will be liable for the defendant’s post-offer costs unless she obtains an equal or better judgment at trial. However, Rule 68 has been used as bit of a sword lately by defendants attempting to defeat class action lawsuits. In 2013 the U.S. Supreme Court held in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) that when a plaintiff’s claim is satisfied through an offer of judgment the claim is mooted and any collective action allegations cannot save the suit. Although the Genesis case involved collective actions under the Fair Labor Standards Act, in the event a court were to extend the Genesis ruling, many class action defendants have made Rule 68 offers of judgment for the full amount of a named plaintiff’s individual claim to try to defeat a class action prior to it being certified.
In this case, J.C. Penney had no luck with a Genesis strategy. After Maire denied the offer of judgment, J.C. Penney Co. filed a motion to dismiss the lawsuit for lack of subject matter jurisdiction arguing that its offer of judgment moots the action because the plaintiff has been offered all of the relief requested in her complaint.* The court disagreed. Instead, the court relied on the Ninth Circuit’s October 2013 decision in Diaz v. First American Home Buyers Protection Corp. that “an unaccepted (emphasis added) Rule 68 offer that would have fully satisfied a plaintiff’s claim does not render that claim moot.”
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