Tender of Settlement Prior to Motion for Class Certification Moots TCPA Claims

On November 18, 2011, the U.S. Court of Appeals for the Seventh Circuit ruled that tendering full settlement of plaintiff’s Telephone Consumer Protection Act demands prior to a motion for class certification effectively mooted plaintiff’s claims.  The plaintiff filed a class action complaint in state court alleging the receipt of unsolicited SMS text messages on behalf of himself and the individuals that he estimated received the messages on their mobile phones from Clearwire Corp.  Clearwire removed the action and subsequently offered to settle by giving plaintiff and approximately ten (10) other individuals allegedly affected $1,500 or each SMS text message they received from Clearwire, plus court costs.  Clearwire’s position was that its offer effectively rendered the case moot by nullifying plaintiff’s “personal stake” in the matter’s outcome.  The district court agreed.  “The rule in the Seventh Circuit is clear – a complete offer of settlement made prior to the filing for class certification moots the plaintiff’s claim,” the district court explained.  The court further opined that when a plaintiff is offered everything that he has asked for and then refuses to acknowledge it, he “loses outright, under Fed. R. Civ. P. 12(b)(1), because he has no remaining stake” in the case.  In so ruling, the Seventh Circuit declined to overturn well-established precedent by creating an exception to mootness in potential class actions where defendants offer relief to named plaintiffs before they “have a reasonable opportunity to seek certification.”  The district court stated, unequivocally, that “four circuits disagree with this approach, but we have not been moved to reverse course.”  If class action plaintiffs are worried about an offer of settlement that may moot their claims, they can move for class certification when they file their complaint, the court instructed.

Please contact us at (212) 756-8777, via email to info@hinchnewman.com or via our Online Case Submission Form.