By Matthew A. Luber
We previously discussed some recent mootness decisions coming out of the federal courts in Florida. Within the context of those cases, we explained that the offer must be “complete” and its language must be carefully considered. We also noted that the Supreme Court in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) analyzed but did not reach the mootness issue, leaving lower courts to their own devices. Quite conveniently, a recent decision out of the District of Maryland touched upon both of these topics. See Kensington Physical Therapy, Inc. v. Jackson Therapy Partners, LLC, 8:11-cv-02467, 2013 U.S. Dist. LEXIS 142527 (D. Md. Oct. 2, 2013). A copy is available here.
There, Plaintiff Kensington Physical Therapy, Inc. (“Plaintiff”) sued Defendant Jackson Therapy Partners, LLC (“Jackson”) under the TCPA. Important to this decision is the time-line of events that occurred before and after the filing of the complaint, which was as follows:
- On January 24, 2011, Plaintiff sent Jackson a letter accusing it of sending unsolicited faxes in violation of the TCPA and demanding payment of statutory damages for each violation.
- Three weeks later, on February 17, 2011, Jackson sent a settlement offer (i) covering all claims for violations of the TCPA (and related state law statutes), and (ii) providing $1,500 for each violation, additional compensation dictated by state law or the court, attorney fees, costs, and/or injunctive relief. The offer, however, contained some qualifying language. For example, the offer was “for settlement purposes only” and “solely to avoid the expense and inconvenience of litigation,” did not “admit any liability” and did not offer to enter a “judgment.”
- On September 1, 2011, and without responding to Jackson’s settlement offer, Plaintiff filed a class action complaint.
- On September 26, 2011, Jackson offered to settle under the same terms as its February offer. Plaintiff rejected that offer.
- On October 12, 2011, Jackson supplemented the offer. Jackson explicitly agreed (1) to judgment entered against it, and (2) to waive any requirement that the judgment be confidential.
- On November 4, 2011, Jackson filed a Motion to Dismiss, arguing that both its original and supplemental pre-class certifications offers render Plaintiff’s claims moot.
On July 30, 2012, the District Court denied Jackson’s Motion to Dismiss. As for Jackson’s original offer, the District Court concluded that it was not a complete offer because it “did not include an express offer of judgment.” It also held that a “catchall” provision does not “subsume any necessary offer of judgment,” particularly where “the catchall provision is ambiguous” and the offer states that it is “for settlement purposes only.”
As for the supplemental offer that did contain an express offer of judgment, the District Court found that it was a complete offer but nonetheless refused to find that the class action was moot. It reasoned that, pursuant to the “relation back” doctrine, Plaintiff’s expected motion for class certification relates back to the filing of the complaint. The relation back doctrine, typically applied to “inherently transitory claims” or claims “capable of repetition, yet evading review,” has been held to allow a plaintiff to avoid mootness if the plaintiff files a motion for class certification “without undue delay.” The District Court said it was following the “majority” view (citing 3rd, 5th, 9th, and 10th Circuit decisions).
Jackson renewed its motion to dismiss in light of Genesis Healthcare, in which the Supreme Court concluded the relation back doctrine does not apply to FLSA collective actions. Last month, the District Court denied Jackson’s motion again. It gave two primary reasons.
First, the District Court explained that, “[a]lthough the Genesis Court acknowledged a circuit split,” it “expressly stated that it ‘[did] not reach this question  or resolve the split’” regarding the relation back doctrine. Indeed, the District Court found “it is unclear that the Genesis Court’s dictum that the relation back doctrine does not apply when the plaintiff’s statutory claims become moot before class certification applies in the Rule 23 context.” Second, while the District Court recognized that “various federal district judges have held in the wake of Genesis that a complete settlement offer made before class certification moots the class action,” the District Court pointed to several courts that “have held the opposite.”
What does Kensington Physical Therapy tell us? It is a reminder that qualifying and/or conditional language should be carefully considered—if not avoided altogether. Interestingly, and perhaps counterintuitively, it also suggests that a settlement offer should include an explicit offer of judgment—even if there is not yet a civil action in which a judgment could be entered. Ultimately the decision may be a product of a court that never believed in the legitimacy of a mooting offer of judgment in the first place. Telling is the District Court’s reference to earlier Maryland federal and state court cases that were hostile to the so-called “pick off,” as well as its justification for the result—that mootness is a “concern  especially acute in TCPA cases because the maximum statutory fine is relatively small and, therefore, remediating TCPA violations may depend on aggregating small claims.”