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Damasco v. Clearwire Corp.

September 2, 2010


The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel



On April 16, 2010, Plaintiff Jerome Damasco ("Damasco" or "Plaintiff") filed in the Circuit Court of Cook County a class action complaint in which he alleges that Defendant Clearwire Corporation ("Clearwire" or "Defendant") violated the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227, and seeks actual and statutory damages, attorneys' fees and costs, and injunctive relief.*fn1 Damasco complains that Clearwire transmitted "wireless spam" in the form of SMS messages to cell phones. Damasco specifically mentions one unsolicited text received on or about September 15, 2009, but he alleges that he received additional messages from "Defendant and/or its agents" in the weeks that followed. Pursuant to section 227(b)(3) of the TCPA, a person may bring an action to enjoin the defendant from committing violations as well as to recover $500 for each violation. If the court finds that the defendant committed wilful or knowing violations, treble damages may be awarded. Id.

On My 14, 2010, Defendant served Plaintiff with a letter, the nature of which is in dispute ("May 14 Letter" or "Settlement Offer"). Defendant characterizes the letter as a settlement offer, but Plaintiff contends it is not an "offer" under Illinois law. In the letter, Defendant offers to resolve all of Plaintiff's claims against Defendant, its subsidiaries and affiliated entities arising from text messages sent during the period April 16, 2006 to the time the letter was served. Defendant offered to pay Plaintiff $1,500 for each text received by Plaintiff as well as fees and costs, and also agreed to the injunctive relief sought by Plaintiff. Defendant extended the same offer (excluding costs) to any other person represented by Plaintiff's counsel as of the date of the offer who had also received unsolicited text messages from Clearwire.

On May 18, 2010, Defendant removed the action to this court pursuant to 28 U.S.C. § 1441(a), on the ground that this court has original federal question subject matter jurisdiction over TCPA claims. That same day, Plaintiff filed a motion in this Court to certify a class in this case. On May 19, 2010, Defendant filed a motion to dismiss Plaintiff's complaint for lack of standing, arguing that the May 14th settlement offer moots Plaintiff's claim.


Article III of the United States Constitution grants to federal courts "judicial power" over "cases" and "controversies." U.S. Const. Art. III § 2. "Both litigants must have a personal interest in the case at the beginning of the litigation, and their interests must persist throughout its entirety." Holstein v. City of Chi., 29 F.3d 1145, 1147 (7th Cir. 1994) (citation omitted). "A case becomes moot when the dispute between the parties no longer rages, or when one of the parties loses his personal interest in the outcome of the suit." Id. "Once 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) (citation omitted). "You cannot persist in suing after you've won." Greisz v. Household Bank (Illinois), 176 F.3d 1012, 1015 (7th Cir.1999).

In the context of a class action, where a plaintiff seeks to represent a class of individuals with similar claims, the application of this doctrine is more complicated. Holstein, 29 F.3d at 1147. "If the district court has certified the class before the expiration of the plaintiff's claims, mootness is avoided." Id.


Defendant moves to dismiss the action on the ground that Defendant's settlement offer moots Plaintiff's claim. Plaintiff first argues that Defendant's offer was not a proper offer and therefore cannot moot Plaintiff's claim. In the alternative, Plaintiff contends that even if the offer is a complete offer for relief, Defendant revoked the offer by removing this action. Finally, Plaintiff maintains that notwithstanding a valid, pending settlement offer for full relief, his claim is not moot where he filed his motion for class certification the four days after the settlement offer was made. For the following reasons, Defendant's motion is granted.

A. The Settlement Offer Was Valid And Not Revoked

In response to Defendant's motion to dismiss, Plaintiff first contends that Defendant's May 14 Letter was not an "offer" under Illinois contract law.*fn2 Under Illinois law, a "settlement agreement is in the nature of a contract and is governed by principles of contract law." K4 Enterprises, Inc. v. Grater, Inc., 914 N.E.2d 617, 624 (Ill. App. Ct. 2009) appeal denied, 234 Ill. 2d 523 (2009). "For a contract to be enforceable, the material terms of the contract must be definite and certain." Id. (citation omitted). "[A] contract 'is sufficiently definite and certain to be enforceable if the court is enabled from the terms and provisions thereof, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do.'" Id. (quoting Midland Hotel Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill. 1987) (citation omitted)). "[A] mere 'manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.'" Cobb-Alvarez v. Union Pacific Corp., 962 F. Supp. 1049, 1054 (N.D. Ill. 1997) (quoting Restatement (Second) of Contracts § 26 (1981)).

Plaintiff maintains that May 14 Letter is not a valid offer because several of its terms are not sufficiently definite or certain. The letter provides that "Clearwire Corporation on behalf of itself and its subsidiaries and affiliated entities, including but not limited to Clearwire Legacy LLC" offers "to pay Plaintiff the sum of $1,500 for each and every text message which Plaintiff received, which was sent by or on behalf of [Clearwire and its subsidiaries and affiliated entities] during the Claim Period." According to Plaintiff, this provision specifies neither the identity of the subsidiaries and affiliates nor the number of messages sent. In the letter, Defendant extends the offer "to any other person or entity represented by Edelson McGuire, LLC, as of the date of this offer who also received a text message sent by or on behalf of Defendants during the Claim Period"*fn3 and who did not consent to or authorize the receipt of the message. Plaintiff argues that this language is also vague in that it fails to identify the parties who sent the messages, the parties who received the messages, and the nature of the messages themselves.

Under Illinois law, a contract is enforceable if it is ascertainable from the terms of the contract what each party has agreed to do. Academy Chicago Publishers v. Cheever, 578 N.E.2d 981, 983 (Ill. 1991). "A contract may be enforced even though some contract terms may be missing or left to be agreed upon, but if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract." Id. at 984. In this case, the Letter makes clear that Clearwire would pay Plaintiff $1,500 for each text message sent to Plaintiff by or on behalf of Clearwire or any of its subsidiaries or affiliates, in addition to taxable costs and the requested injunctive relief. Though no particular number of messages is listed, the Letter states that Clearwire would pay for "each and every message" - meaning all messages received by Plaintiff. This is not an indefinite term. Although the Letter does not identify by name the other potential plaintiffs to whom the offer was extended, they are identified with sufficient clarity. It is also difficult to see why Clearwire's failure to "identify" the text messages invalidates the offer, where Clearwire has agreed to compensate Plaintiff for each and every unauthorized message from Defendant, regardless of its subject.

Also problematic, argues Plaintiff, are the following requests contained in the May 14 Letter: (1) that Plaintiff advise Defendant's counsel "in writing as to the number of text messages which Plaintiff received during the Claim Period which were sent to him by or on behalf of Defendants" so that Defendant's counsel may arrange for payment; and (2) that Plaintiff and any other person eligible for settlement "execute a release, releasing Defendants and others from liability for any and all claims arising from or related to Plaintiff's claims[.]" These requests require that Plaintiff "take steps" before the offer ...

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