Full Settlement Offer Before Motion For Class Certification Moots Case
DAMASCO v. CLEARWIRE CORPORATION (November 18, 2011)
.jpg)
Jerome Damasco brought a class action suit in state court against Clearwire Corporation. He alleged that Clearwire sent unsolicited text messages in violation of the Telephone Consumer Protection Act. He sought both injunctive relief and damages for the more than 1,000 people he estimated received the text messages. Clearwire offered to settle the case by paying Damasco (and up to 10 additional people) the maximum statutory penalty ($1,500) and agreed to stop sending the unsolicited messages. Damasco never responded. A few days later, Clearwire removed the case to federal court. Damasco moved for class certification almost immediately. Within a day, Clearwire moved to dismiss on the grounds that its settlement offer rendered the case moot. Judge Zagel (N.D. Ill.) agreed with Clearwire and dismissed, concluding that the Seventh Circuit's Holstein decision controlled. A complete settlement offer before a class certification filing moots the named plaintiff’s claim. Damasco appeals.
In their opinion, Seventh Circuit Judges Manion, Rovner, and Tinder affirmed. Article III of the Constitution requires federal courts to hear only live cases and controversies. As such, a party must maintain a personal stake in the litigation. Here, once Clearwire expressed its willingness to give Damasco everything to which he may have been entitled under the law, there is no more controversy. The Court has held in the past that a plaintiff cannot avoid mootness simply by moving to certify the class after the offer. Although the Court recognized that several other circuits have allowed plaintiffs to seek class certification after such a full offer, the Court reiterated its belief that such a rule violated Article III and declined to adopt it. A simple solution exists to any concern that defendants could frustrate class actions by simply offering each named plaintiff a full settlement. That solution is to move for class certification at the time the complaint is filed. The filing of the motion protects the plaintiffs and the class. The Court also noted that a plaintiff, to the extent he believes he is not ready to place the class certification issue to the court, can seek additional time for further investigation or discovery.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select