District Court (Cal.) Finds that Genesis did not Overrule 9th Circuit’s Pitts Decision; Rule 68 Offer to TCPA Class Plaintiff Did Not Moot the Action

In Craftwood II, Inc. v. v. Tomy Intern., Inc., 2013 WL 3756485 (C.D.Cal. 2013), Judge Carter rejected the use of the FRCP 68 device made to the individual class-representative to moot a TCPA class action after Genesis.  Defendant’s counsel sent Plaintiff a settlement offer. “In order to end this litigation now,” Tomy offered Plaintiff $1,500 for each faxed advertisement that Tomy, or any of its predecessors and subsidiaries, sent to Plaintiff in violation of the TCPA. In the letter, Defendant agreed to pay Plaintiff’s costs, to pay any prejudgment interest on statutory damages, if such interest is required by law, and to accept entry of an injunction prohibiting Tomy from sending any unsolicited faxed ads that violate the TCPA. The letter repeatedly specified that it is agreed to the relief that Plaintiff could individually obtain from the Defendant.  Defendant extended the same offer to other possible, unknown plaintiffs represented by Plaintiff’s counsel.   Judge Carter found that Genesis did not overrule the 9th Circuit’s decision in Pitts, and, therefore, the offer neither mooted Plaintiff’s claim nor the required dismissal of the TCPA class action.

To sum up, while the five-Justice majority in Genesis does attack some of the logic of the precedent on which Pitts relies,FN5 its holding does not cover class actions, nor does it even address how a rejected offer could moot a claim. Like district courts in the Ninth Circuit both before FN6 and after FN7 Genesis, this Court concludes that Pitts controls the outcome. Until the Ninth Circuit decides otherwise, the attempt to buy off a class plaintiff’s claim remains “a facile procedural ‘gotcha’ “ that tries to make an “end-run around a class action.” Gomez, 805 F.Supp.2d at 930.  [FN5. See Chen v. Allstate Ins. Co., 2013 WL 2558012 at *7–*9 (N.D. Cal. June 10, 2013).]  [FN6. See Gomez v. Campbell—Ewald Co., 805 F.Supp.2d 923, 930 (C.D.Cal.2011); Ramirez v. Trans Union, LLC, 2013 WL 1089748 (N.D.Cal. Mar. 15, 2013).] [FN7. See Chen v. Allstate Ins. Co., 2013 WL 2558012; Canada v. Meracord, LLC, 2013 WL 2450631 (W.D. Wash. June 6, 2013). Tomy’s claim that this case differs from Pitts because the Settlement Offer was not made pursuant to Rule 68 is not persuasive. Damasco, the Seventh Circuit case favorable to Defendant, recognized as much, noting that although buy-off offers in its case were not made under Rule 68, the “same analysis seems to apply to any offer of complete relief.” 662 F.3d at 896. Indeed, here the Settlement Offer would seem less final than a Rule 68 offer of judgment, because the Offer leaves open questions that would lead to more adjudication, such as the validity of the claims and the number of faxes.]