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Martin v. PPP

June 25, 2010


The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge


Nicholas Martin ("Martin") has brought this putative class action against defendants PPP, Inc. ("PPP") and Fidelity Communications Corporation ("Fidelity") for alleged violations of the Telephone Consumer Protection Act of 1991 ("TCPA," "the Act"), 47 U.S.C. § 227.*fn1 Martin's suit claims that the defendants were responsible for using an automatic telephone dialing system ("ATDS") to make a call featuring a prerecorded promotional message for Papa John's Pizza to his cell phone in July 2009. Count I of the complaint seeks statutory damages of $500 for each violation of the Act; Count II seeks to treble the damages for each violation on the ground that the defendants' violation of the Act was wilful; and Count III seeks a permanent injunction prohibiting the defendants from making future calls to cell phones using ATDSs or prerecorded voice messages. Martin's complaint purports to bring the suit on behalf of all individuals within certain area codes in the Chicago region who received such calls on their cell phones from either or both of the defendants without consent during the past four years.

Each of the defendants has filed a motion to dismiss for lack of subject matter jurisdiction. For the reasons discussed below, I grant Fidelity's motion and deny PPP's motion.


Martin filed the complaint in this suit on January 11, 2010.

On February 26, 2010 -- before Martin had filed a motion for class certification -- Fidelity presented Martin with a settlement offer that was intended to provide him with all of the relief he sought in his suit. Specifically, in a letter sent to Martin's counsel, Fidelity offered Martin "$1,500 for each and every pre-recorded call which [Fidelity] or PPP, Inc. sent to any cell phone" owned or paid for by Martin. Fidelity's Mem. Motion to Dismiss, Ex. 1 at 3. The offer also agreed to pay any costs that Martin would recover if he were to prevail at trial. Further, Fidelity agreed "to the entry of a stipulated injunction against it as requested in Count III of the Complaint," prohibiting Fidelity "from placing pre-recorded calls to cellular phones in violation of the TCPA." Id. at 4. Finally, Fidelity's offer included a catchall clause that agreed to provide "Plaintiff with any other relief which is determined by the Court to be necessary to fully satisfy all of the individual claims of Plaintiff in the Lawsuit or the similar claims of any other person to whom this offer is extended." Id.

Martin rejected the offer on March 11, 2010 and filed a motion for class certification the next day. After receiving Martin's rejection of its offer, Fidelity filed the instant motion to dismiss, arguing that by offering Martin all of the relief sought in his complaint, his suit had been rendered moot. After Fidelity's motion to dismiss had been fully briefed, PPP filed a separate motion to dismiss. PPP reiterates Fidelity's arguments that Fidelity's settlement offer provided Martin with complete relief. In addition, PPP argues that Fidelity alone was responsible for the offending calls, and that Martin is not entitled to injunctive relief against PPP. Nevertheless, PPP agrees in its motion to dismiss to abide by an injunction that would forbid it from making any further calls to Martin's cell phone.


"Article III of the United States Constitution confers on the federal courts jurisdiction over cases and controversies." Holstein v. City of Chicago, 29 F.3d 1145, 1147 (7th Cir. 1994). The Seventh Circuit has explained that "[o]nce the defendant offers to satisfy the plaintiff's entire demand, there is no dispute over which to litigate, and a plaintiff who refuses to acknowledge this loses outright, under Fed. R. Civ. P. 12(b)(1), because he has no remaining stake." Rand v. Monsanto Co., 926 F.2d 596, 598 (7th Cir. 1991). In the class action context, "an offer's effect depends on its timing: offers received before a motion for class certification is filed moot the case, but offers received after the motion has been filed do not." White v. Humana Health Plan, Inc., No. 06 C 5546, 2007 WL 1297130, at *6 (N.D. Ill. May 2, 2007). If a plaintiff files a class certification motion during the ten-day period following an offer of judgment, the case is not mooted. See, e.g., Western Ry. Devices Corp. v. Lusida Rubber Prods., Inc., No. 06 C 0052, 2006 WL 1697119, at *2 (N.D. Ill. June 13, 2006) ("The Seventh Circuit has not addressed the question of the effect of a motion to certify a class filed during the pendency of a Rule 68 offer of judgment. However, a number of judges in this district have addressed this issue and uniformly concluded that the filing of a motion to certify a class during the ten day period after a defendant makes an offer of judgment prevents mootness of a plaintiff's claim.").

Martin claims that Fidelity's offer does not moot his action because the offer does not provide him with complete relief. In particular, he objects to the offer because: (1) it is not an offer of judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure; (2) it fails to provide reimbursement of $1,500 per violation of the TCPA and instead offers only $1,500 per call; (3) it agrees only to discontinue making calls using prerecorded messages, despite the fact that Martin's complaint additionally requests an injunction against the use of ATDSs; and (4) the offer agrees to the requested injunctive relief only with respect to Fidelity and contains no provision to prevent PPP from making future calls in violation of the TCPA.

1. Federal Rule 68

Martin first objects to Fidelity's settlement offer on the ground that it does not constitute an offer of judgment pursuant to Rule 68. This contention lacks any foundation in the relevant case law. Martin not only fails to cite any case holding that a settlement offer can moot an action only when made pursuant to Rule 68; he is also unable to distinguish or rebut the cases that Fidelity cites to the contrary. For example, Martin himself acknowledges that the settlement offer at issue in Holstein rendered the plaintiff's claims moot, despite the fact that the offer was not made pursuant to Rule 68. See Pl.'s Resp. at 6. Holstein involved an action brought against the City of Chicago by two separate plaintiffs whose cars had been towed for parking violations. As relevant here, the first plaintiff, Grove, sought a declaratory judgment that certain of the City's administrative procedures, and certain provisions of the City's municipal code, were unconstitutional. Three months after Grove's car was towed, the City determined that the towing had been improper. The City informed Grove of its decision and offered to refund the costs he had incurred in retrieving his vehicle. Grove refused to accept reimbursement and insisted on proceeding with his suit. The Seventh Circuit held that since the City had offered to fully satisfy Grove's claims, his suit was moot.

It is true that neither Holstein, nor any other Seventh Circuit case, addresses the Rule 68 issue explicitly. Nevertheless, dicta in the Seventh Circuit's cases strongly support the conclusion that a suit may be mooted by an offer of complete relief, irrespective of Rule 68. In Greisz v. Household Bank, 176 F.3d 1012 (7th Cir. 1999), for example, the plaintiff brought claims against a bank and other defendants under the Truth in Lending Act and under Illinois law. The plaintiff sought class certification, but the district court denied the motion. The district court later granted summary judgment to the defendants on all but a portion of one of Greisz's claims. The bank then presented Greisz with an offer of $1,200 (plus reasonable costs and attorney's fees) under Rule 68. ...

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