Way back in 2013 I accomplished the first successful post-Genesis pick off move of a TCPA class action in the nation and I thought I was soooo cool.
I mean, it was pretty cool.
The concept is simple. If a Plaintiff sues you over one phone call the most they can recover is $1,501.00 under the TCPA’s statutory damages provision. So, rather than fight why not just pay them the $1,501.00 and be done with the case? The argument is that the Plaintiff’s claim has effectively been mooted—there is literally nothing left to fight over—and moot cases can’t be pursued in federal court. (I learned that in law school—thanks Professor Rubenstein.) When it works—as it did for me in Masters, A-12-CA-376-SS, 2013 WL 3713492 at *3 (W.D.Tex. July 11, 2013)—you can avoid hundreds of thousands of dollars in expense and tremendous potential class exposure with a quick and painless stroke from a checkbook.
So why doesn’t everyone follow my lead?
Well, stay with me.
In Genesis the Supreme Court had held that requests for money—i.e. statutory damages—did not fit any of the exemptions to the mootness doctrine (such as evading review, etc.) so that really opened the door for the destruction of the so-called “relation back doctrine” that appellate courts had created for the purpose of forbidding pick off moves. The concept, essentially, is that if a Plaintiff had standing to bring a suit in the first place then the case could not be mooted until the Plaintiff had a chance to seek certification—standing “related back” to the filing of the complaint to allow the Plaintiff to seek certification even if their claim was subsequently mooted by, say, an offer of full relief. But Genesis demonstrated that “relation back” was all and entirely wrong. Or so it seemed.
A couple years later, however, the Supreme Court lurched back the opposite direction in Campbell Ewald. While CE didn’t quite close the door to pick off moves it made it much harder to accomplish from a logistical perspective. The Supremes clarified that a mere offer of judgment was simply not enough to moot a claim. It reserved the issue of whether actually paying off the plaintiff—such as by depositing money into a bank account for the plaintiff’s benefit—might moot a claim. And, importantly, it did not touch Genesis’ previous determination that a claim for money never evaded review.
As one would expect there was a flurry of activity post-Campbell Ewald with TCPA defendants trying interesting ways of buying off claims. I always thought the right move was to put a bunch of cash in a garbage bag deliver it to the plaintiff’s door like an Amazon delivery, but I never got a chance to try it. The Ninth Circuit quickly handed down Chan holding that TCPA claims could not be mooted by such fancy maneuvers before I could take my shot. Other district courts rapidly followed suit.
Pretty soon the whole idea of mooting TCPA claims fell out of vogue as more effective defense maneuvers—particularly efforts around Article III standing—developed. But theoretically the ability to end TCPA class actions with the stroke of a pen (or a bag drop) still exists, at least in some jurisdictions.
So all of this explains why Bais Yaakov of Spring Valley v. Educ. Testing Serv., No. 13-CV-4577 (KMK), 2021 U.S. Dist. LEXIS 18699 (S.D.N.Y. January 31, 2021) is such a nifty little ruling.
In a real Throwback Thursday effort the Defendant in BYOSV sent an unconditional check for $12k (statutory damages plus fees) to the Plaintiff’s lawyer and said “its yours unconditionally.” It then moved the court to enter judgment against it including, if necessary, an injunction forbidding future unlawful conduct.
The Plaintiff handed back the money and opposed the motion—yep, Plaintiff asked the court not to enter judgment in its favor for the full amount of statutory damages it could recover.
The Court dispensed with Plaintiff’s opposition and finding that the $12k fully satisfied the Plaintiff’s claim entered judgment in its favor, over its objection. It also found that the Plaintiff’s claim for an injunction lacked merit—which is worth a separate discussion below.
So what’s going on here?
Well the plaintiff had previously moved for certification and lost. The defendant presumably feared: i) an appeal; and ii) a second certification effort. So to cut that effort of at the knees it sought to have an individual judgment entered against it while there was some procedural daylight. It worked. Now district court level proceedings are done. And it is very unclear whether standing to pursue an appeal exists. (The BYSVE court reserved the issue as it says in Footnote 5: “ The Court does not decide whether Plaintiff maintains a sufficient stake in the litigation to appeal the Court’s denial of its motion for class certification.”)
The important procedural nuance here is that the court had already denied certification to the Plaintiff. Most post Campbell Ewald courts hold—somewhat out of thin air—that a Plaintiff must be given a reasonable opportunity to seek certification before a pick off move can be accomplished. That’s not what the Supreme Court actually held in CE but hey, who’s keeping track? Since the Plaintiff in BYOSV had already taken his shot and missed, however, there could be no impediment to a pick off move.
Now the only real question is what happens on appeal. If the Second Circuit finds the Plaintiff lacks standing to challenge the judgment—remember mootness is a standing issue—then the BYOSV Defendant is sitting pretty. Then again, the Second Circuit might disagree and conclude the entire pick off move was ill conceived and send the case back down to the district court for further consideration.
Notably, if the Second Circuit does affirm that would create a circuit split with the Ninth Circuit and—oh gees, another TCPA Supreme Court case may be in the offing. How unexpected. And by unexpected I mean completely expected, Perry the Platypus.
Circling back to the injunction piece of the case real quick—many courts hold that the traditional elements necessary for an injunction (i.e. irreparable harm and the like) do not need to be shown in the context of a TCPA injunction because it is statutory in nature. The Court in BYSOV disagreed, however, and grafted all of the common law equitable requirements for an injunction on to the TCPA. That’s pretty important and—depending on what the Second Circuit does on the mootness issue—may be the most enduring piece of the BYOSV ruling here.