United States District Court, E.D. Missouri, Eastern Division
JOHN PRATER, on behalf of himself and others similarly-situated, Plaintiff,
MEDICREDIT, INC., and THE OUTSOURCE GROUP, INC., Defendants.
MEMORANDUM AND ORDER
NOELLE C. COLLINS, Magistrate Judge.
Before the court is the Motion to Strike Defendants' Offer of Judgment filed by Plaintiff John Prater. (Doc. 13). The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Doc. 9). The matter is fully briefed and ready for disposition.
On January 28, 2014, Plaintiff filed a Class Action Complaint, pursuant to Fed.R.Civ.P. 23(a) and (b), for alleged violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. (Doc. 1). The Complaint alleges that Medicredit, Inc., and The Outsource Group, Inc. (jointly, Defendants) acted together and "routinely violate[ed] 47 U.S.C. § 227(b)(1)(A)(iii) by placing non-emergency telephone calls to the cellular telephones of consumers using an automatic telephone dialing system and/or an artificial or prerecorded voice, without the prior express consent of the consumers." (Doc. 1, ¶¶ 3, 9). The Complaint alleges that, commencing in March 2013, Medicredit placed calls to Plaintiff's cellular telephone and left a pre-recorded message, in an attempt to collect a debt from a third person, whom Plaintiff did not know; Plaintiff spoke with a representative of Medicredit and told the representative that he was not the third person and instructed the representative not to call him again; after Plaintiff spoke with Medicredit's representative, Medicredit, on numerous specified dates, placed calls to Plaintiff's cellular telephone and left a pre-recorded message in an attempt to collect a debt from the third party; Defendants did not have Plaintiff's prior express consent to make any telephone calls to Plaintiff's cellular telephone; and "Defendants had knowledge that they were using, and intended to use, an automatic telephone dialing system to make and/or an artificial prerecorded voice to place the telephone calls identified [by Plaintiff]." (Doc. 1, ¶¶ 10-42).
On March 13, 2014, Defendants filed an Answer to the Complaint. (Doc. 10). On April 18, 2014, the court ordered that the parties submit a Joint Scheduling Plan by May 16, 2014. (Doc. 11). The parties then submitted their Joint Scheduling Plan on May 13, 2014. (Doc. 12). On May 15, 2014, Plaintiff filed the pending Motion to Strike Defendants' Offer of Judgment (the Offer), which Offer was dated May 8, 2014. (Doc. 13). The court issued a Case Management Order on May 23, 2014, which Order provides that discovery relevant to class certification should be completed by November 14, 2014; and that a Class Certification Hearing will be held on June 15, 2015. (Doc. 18).
The purported Offer of Judgment is not before the court, but Plaintiff asserts in the pending motion that, on May 8, 2014, Defendants served upon Plaintiff an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure in the total amount of $34, 500.00, plus costs, but without attorneys' fees; that the Offer equals the allowable damages under the statute multiplied by the number of violations; and that the Offer did not address relief for the proposed class. (Doc. 14 at 3).
In support of the pending Motion, Plaintiff argues that the Offer is an improper attempt to "pick off" the named plaintiff in this putative class action; that the Offer is an attempt by the defendants to "shirk" the requirements of Rule 23 of the Federal Rules of Civil Procedure; and that Defendants should not be able to employ the Offer in the context of a class action suit, because the risk of Plaintiff being held liable for Defendants' costs, should he eventually obtain a judgment less favorable than that which was offered, injects an improper conflict of interest between Plaintiff and the unnamed class members. (Doc. 14). Plaintiff also contends that March v. Medicredit, Inc., 2013 WL 6265070 (E.D. Mo. Dec. 13, 2013) (unpublished), is directly on point and provides authority for granting his Motion. (Doc. 21).
In opposition to Plaintiff's Motion, Defendants argue that claims arising under the TCPA are not suitable for disposition pursuant to a class action. Defendants also invite the court to inquire regarding the appropriateness of the proposed class in this case. Defendants' argument concerning class appropriateness is not only premature, but it is unresponsive to the pending Motion and, therefore, the court will not address it. Defendants also argue that the cases upon which Plaintiff relies in support of his Motion involve statutory causes of action other than the TCPA, and that, therefore, those cases do not support Plaintiff's Motion. Defendants also contend that, "[a]s a matter of policy, Plaintiff should not be permitted to have Defendants' offer in complete satisfaction of Plaintiff's claim stricken because of the pressure' to Plaintiff caused by the potential for cost-shifting at trial." (Doc. 19 at 3-9). Finally, Defendants contend that March, 2013 WL 6265070, is distinguishable because it involved a class action claim under the Fair Debt Collections Practices Act (FDCPA), while the pending matter is brought pursuant to the TCPA. (Doc. 25). For the following reasons, the court finds Defendants' arguments unpersuasive and that Plaintiff's Motion should be granted.
Offers of judgment are governed by Fed.R.Civ.P. 68, which provides, as relevant:
(a) Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued
(d) Paying Costs After an Unaccepted Offer. If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.
"The plain purpose of Rule 68 is to encourage settlement and avoid litigation.... The rule prompts both parties to a suit to evaluate the risks and costs of litigation, and to balance them against the likelihood of success upon trial on the merits." Marek v. Chesny , 473 U.S. 1, 5 (1985). As to whether Rule 68 is applicable in a class action context, the relevant authority within the Eighth Circuit provides that "the Eighth Circuit would likely not allow a defendant to pay off the named plaintiff to preemptively force dismissal of the putative class action." March, 2013 WL 6265070, at *3 (emphasis added) (citing Liles v. Am. Corrective Counseling Servs., Inc. , 201 F.R.D. 452, 455 (S.D. Iowa 2001)). See Hartis v. Chicago Title Insurance, Co. , 694 F.3d 935 (8th Cir. 2012) (quoting Alpern v. Utilicorp United, Inc. , 84 F.3d 1525, 1539 (8th Cir. 1996) ("Judgment should be entered against a putative class representative on a defendant's offer of payment only where class certification has been properly denied and the offer satisfies the representative's entire demand for injuries and cost of the suit.")). Although the Supreme Court held in Genesis Healthcare Corp. v. Symczyk , 133 S.Ct. 1523 (2013), that a plaintiff's collective action under the Fair Labor Standards Act, where no other plaintiffs had opted in, was mooted by an offer of judgment which completely satisfied the plaintiff's claim, authority within this Circuit provides that Genesis is ...