Cross-posted at WLF’s Forbes.com contributor page
Three dentists, a pest control service, and two others received unsolicited faxes for tickets to a Tampa Bay Buccaneers’ home game. . . .
Looking for the punch line? This is not the beginning of a bad joke about a last place football team. It’s a scenario that gave rise to a class-action lawsuit in the U.S. District Court for the Middle District of Florida. The undeservedly overlooked October 24 opinion, which dismissed the case and accepted an unorthodox defense gambit, offers one judge’s candid thoughts on how the class-action mechanism can be abused.
The Telephone Consumer Protection Act, passed in 1991 when fax machines were used for more than collecting dust, imposed a $500 fine per unsolicited fax sent, which rose to $1,500 if plaintiffs could prove “willful or knowing” spamming activity. Not surprisingly, the Act has been popular with class action lawyers. The lawyers plaintiffs in Stein v. Buccaneers Limited Partnership claimed to be suing on behalf of over 100,000 people who received the ticket solicitation via fax.
The plaintiffs filed suit in state court, and Buccaneers Limited Partnership (BLP) removed it to federal court on August 16. Three days later, BLP offered judgment to six of the plaintiffs under Federal Rule of Civil Procedure 68, which constituted complete relief for their alleged injuries. On August 21, BLP moved to dismiss the class action because its offer of judgment removed the plaintiffs’ interest in the case, and thus they no longer had Article III standing to proceed. The following day, the plaintiffs moved for class certification. The sequence of these events critically influenced the court’s reasoning.
On the question of mootness after an offer of judgment, presiding Judge Steven Merryday lacked binding precedent from the U.S. Court of Appeals for the Eleventh Circuit. Two opinions from the Southern District of Florida had previously found class actions moot in similar circumstances. One circuit, the Seventh, had also upheld mootness previously, while four others (the Third, Fifth, Ninth, and Tenth) had rejected it. Judge Merryday found the Seventh Circuit’s reasoning in Damasco v. Clearwater Corp. most compelling. Continue reading