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Geismann v. ZocDoc, Inc.

United States Court of Appeals, Second Circuit

March 9, 2017

Radha Geismann, M.D., P.C., individually and on behalf of all others similarly situated, Plaintiff-Appellant,
v.
ZocDoc, Incorporated, Defendant-Appellee, John Does 1-10, Defendants.

          Argued: June 5, 2015

          Final Submission: February 1, 2016

         Radha Geismann, M.D., P.C., appeals from a judgment of the United States District Court for the Southern District of New York (Louis L. Stanton, Judge) dismissing its putative class action suit against ZocDoc, Inc., alleging violations of the Telephone Consumer Protection Act. The district court concluded that a settlement offer, made by ZocDoc but rejected by Geismann, would have afforded Geismann complete relief, notwithstanding a pending class-certification motion. The court entered judgment in Geismann's favor in the amount and under the terms of the unaccepted offer and dismissed the action for lack of subject matter jurisdiction on the ground that it had become moot. We conclude that the settlement offer did not render the action moot and that judgment should not have been entered nor the action dismissed on that basis. The judgment of the district court is therefore:

          GLENN L. HARA (David M. Oppenheim, on the brief), Anderson Wanca, Rolling Meadows, Illinois, for Plaintiff-Appellant.

          BLAINE C. KIMREY (Charles J. Nerko, Vedder Price P.C., New York, New York, Bryan K. Clark, on the brief), Vedder Price P.C., Chicago, Illinois, for Defendant-Appellee.

          Before: Sack, Hall, and Carney, Circuit Judges. [*]

          SACK, CIRCUIT JUDGE.

         Plaintiff-appellant Radha Geismann, M.D., P.C. ("Geismann"), appeals from the district court's dismissal of its putative class action against the defendant-appellee ZocDoc, Inc. ("ZocDoc"), alleging violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. Geismann's suit stems from two unsolicited telecopies (colloquially and hereinafter "faxes") it allegedly received from ZocDoc. After Geismann filed a complaint and motion for class certification, ZocDoc made a settlement offer to Geismann as to its individual claims pursuant to Federal Rule of Civil Procedure 68. Geismann rejected the offer. ZocDoc then moved to dismiss the action for lack of subject matter jurisdiction on the ground that its offer afforded Geismann complete relief, thereby mooting the action. The United States District Court for the Southern District of New York (Louis L. Stanton, Judge) granted the motion, agreeing with ZocDoc that the rejected offer, which the court concluded would have afforded Geismann complete relief on its individual claims, rendered the entire action moot, notwithstanding the pending class-certification motion. The court entered judgment in Geismann's favor under the terms offered by ZocDoc and dismissed the action. While this appeal was pending, the district court granted ZocDoc leave to deposit a check in the amount of $6, 100.00 with the Clerk of the United States District Court for the Southern District of New York in satisfaction of judgment.

         We conclude that the action was not and is not "moot." An unaccepted Rule 68 offer of judgment is, regardless of its terms, a legal nullity.

         BACKGROUND

         Geismann, a Missouri corporation, alleges that it received from ZocDoc, a Delaware corporation, two unsolicited faxes advertising a ''patient matching service'' for doctors. Joint Appendix (''J.A.''[1]) 43, 57-58. Both faxes stated that if the recipient wished to ''stop receiving faxes, '' he or she could call a domestic telephone number provided in the fax. J.A. 57, 58.

         In 2014, Geismann filed a complaint in Missouri state court[2] alleging that these faxes violated the TCPA, [3] which prohibits, inter alia, the use of ''any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement, unless'' the sender and recipient have an ''established business relationship, '' the recipient volunteered its fax number directly to the sender or through voluntary participation in a directory or other public source, or the fax meets certain specified notice requirements. 47 U.S.C. § 227(b)(1)(C); see also id. § 227(a)(5) (''The term 'unsolicited advertisement' means any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise.'').

         The complaint requested between $500.00 and $1, 500.00 in damages for each TCPA violation, an injunction prohibiting ZocDoc from sending similar faxes in the future, and costs. See id. § 227(b)(3) (providing a private right of action for injunctive relief and damages in the amount of ''actual monetary loss'' or ''$500 . . . for each [] violation, whichever is greater, '' to be tripled at the court's discretion if the defendant ''willfully or knowingly violated [the statute]'').

         The complaint also requested that the case be treated as a class action. Geismann filed a separate motion for class certification pursuant to Missouri law the same day that it filed the complaint. The certification motion contained a footnote explaining that Geismann filed the motion at the same time as the complaint because the ''[d]efendants in class litigation have resorted to making individual settlement offers to named plaintiffs before a class action is certified in an attempt to 'pick-off the putative class representative and thereby derail the class action litigation." Pl.'s State Ct. Mot. for Class Certification at 1 n.1 (J.A. 19).

         On March 13, 2014, ZocDoc removed the action to the United States District Court for the Eastern District of Missouri, invoking federal question jurisdiction. See 28 U.S.C. §§ 1331, 1367. Two weeks later, ZocDoc made an offer of judgment to Geismann pursuant to Federal Rule of Civil Procedure 68 for (1) $6, 000, plus reasonable attorney's fees, [4] in satisfaction of Geismann's individual claims, and (2) an injunction prohibiting ZocDoc from engaging in the alleged statutory violations in the future. On April 8, 2014, Geismann rejected the offer ...


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