U.S. Court of Appeals for the Third Circuit

PHILADELPHIA – A federal appeals court has thrown out a motion to dismiss in a potential class action lawsuit involving a Brooklyn physician and the Swiftwater-based vaccination division of the Sanofi pharmaceutical company, citing a recent U.S. Supreme Court decision relating to unaccepted settlement offers.

Judge Anthony J. Scirica of the U.S. Court of Appeals for the Third Circuit ruled Wednesday that an unaccepted offer of judgment under Federal Rule of Civil Procedure 68, made before a plaintiff files a motion for class certification did not make the plaintiff’s entire action moot, including the putative class claims, and thereby does not deprive a court of federal subject-matter jurisdiction – pointing a recent U.S. Supreme Court decision in Campbell-Ewald Company v. Gomez.

Brooklyn-based physician Dr. Ari Weitzner and his professional corporation, “Ari Weitzner, M.D., P.C.”, filed a putative class action against both Sanofi Pasteur, Inc. and Vaxserve, Inc. in November 2011 in the U.S. District Court for the Middle District of Pennsylvania, for alleged violations of the Telephone Consumer Protection Act (TCPA).

The plaintiffs allege that, “Beginning at least as early as April 21, 2004, defendants transmitted more than 10,000 facsimiles to plaintiffs and the other members of the class…without the prior express invitation or permission of plaintiffs and the other members of the class.”

On Nov. 15, 2013 – after plaintiffs filed the potential class action, and with no motion for class certification filed – defendants made offers of judgment under Rule 68 to both Weitzner and his professional corporation.

In each offer, the defendants offered: “$1,500 for each and every facsimile advertisement sent to plaintiff…as alleged in plaintiffs’ complaint…and in addition any such other relief which is determined by a court of competent jurisdiction to be necessary to fully satisfy all of the individual claims of plaintiff.”

Further, the defendants noted in each offer that the agreed-upon number of facsimile transmissions the plaintiffs received were 11, plus the defendants offered to pay costs and to stop sending any facsimile advertisements in violation of the TCPA. In conjunction with Rule 68, the offers provided that if the plaintiffs “failed to accept this offer of judgment within 14 days as specified in Rule 68, it will be deemed as withdrawn.”

However, the plaintiffs did not respond to the offers, and on Dec. 4, 2013 – more than 14 days after the defendants made their offers – the defendants moved to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), believing their unaccepted offers mooted the plaintiffs’ case. At that time, the plaintiffs had not moved (and still have not subsequently moved) for class certification.

On March 12, 2014, District Court Judge A. Richard Caputo denied the defendants’ motion to dismiss. Caputo decided “the offers would provide complete relief to plaintiffs in their individual capacities, but…held plaintiffs’ action could proceed because they had not engaged in ‘undue delay’ in failing to file their motion for class certification, and a successful class certification motion would ‘relate…back to the filing of the class complaint.”

Scirica said Caputo certified his order denying the defendants’ motion to dismiss so the Third Circuit could review the question of whether an unaccepted offer of judgment in a potential class action lawsuit, made before class certification, moots an entire plaintiff’s action including class claims, and deprives a court of federal subject-matter jurisdiction.

Campbell-Ewald involved a class action filed by Jose Gomez, alleging the Campbell-Ewald Company, an advertising and marketing communications agency, violated the Telephone Consumer Protection Act by using an automatic dialing system to send text messages to cellular telephones without the recipients’ prior express consent,” Scirica said.

“Campbell-Ewald filed an offer of judgment under Rule 68 in an attempt to settle Gomez’s individual claim. After Gomez did not accept the settlement offer and allowed Campbell-Ewald’s Rule 68 submission to lapse after the fourteen days specified in the Rule, Campbell-Ewald moved to dismiss under Rule 12(b)(1), contending the unaccepted offer made the case moot,” Scirica added.

In that case, Scirica explained the Supreme Court held “an unaccepted offer to satisfy a named plaintiff’s individual claim is not sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated”, and further stated “in accord with Rule 68 of the Federal Rules of Civil Procedure…an unaccepted settlement offer has no force.”

“These holdings resolve the question presented to us on interlocutory review. Because an unaccepted settlement offer ‘has no force,’ it moots neither plaintiffs’ individual claims nor the case as a whole,” Scirica said.

The appellants are represented by Carl J. Greco of Greco Law Associates, in Scranton.

The appellees are represented by Daniel A. Osborn of Osborn Law in New York City and Todd C. Bank in Kew Gardens, N.Y.

U.S. Court of Appeals for the Third Circuit case 14-3423

U.S. District Court for the Middle District of Pennsylvania case 3:11-cv-02198

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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