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Radha Geismann, M.D., P.C., A Missouri Professional Corporation, and v. Allscripts Healthcare Solutions

January 18, 2011

RADHA GEISMANN, M.D., P.C., A MISSOURI PROFESSIONAL CORPORATION, AND AS THE REPRESENTATIVE OF A CLASS OF SIMILARLY SITUATED PERSONS, PLAINTIFF,
v.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC., ET AL. , DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Young B. Kim

MEMORANDUM OPINION and ORDER

Radha Geismann, M.D., P.C. ("Geismann") alleges that Allscripts Healthcare Solutions, Inc. ("Allscripts") sent it and a class of similarly situated persons unsolicited advertisements via facsimile, in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA") and Illinois law. After Geismann refused Allscripts's offer of judgment under Federal Rule of Civil Procedure 68, Allscripts filed the current motion to dismiss pursuant to Rule 12(b)(1), arguing that the case is now moot. For the following reasons, Allscripts's motion to dismiss is denied:

Background

On July 17, 2009, Geismann filed its class action complaint in the Circuit Court of Cook County, Illinois. (R. 1, Ex. A.) Along with its complaint, Geismann submitted a motion for class certification, seeking to certify a class of persons who, within three distinct time periods (presumably to account for different statutes of limitations): (2) were sent telephone facsimile messages of material advertising the commercial availability of any property, goods, or services by or on behalf of Defendant, (3) with respect to whom Defendant did not have prior express permission or invitation for the sending of such faxes and (4) with whom Defendant did not have an established business relationship.

(R. 72-1, Ex. A at 1-2.) The motion also states that Geismann "will file a supporting Memorandum of Law in due course." (Id. Ex. A at 2.)

On August 20, 2009, Allscripts removed this case to federal court. (R. 1. ) The assigned district judge dismissed the complaint without prejudice to the filing of an amended federal complaint, which Geismann filed in October 2009. (R. 13-14.) Shortly thereafter, in November 2009, the parties consented to the jurisdiction of Magistrate Judge Schenkier. See 28 U.S.C. § 636(c). After the parties began limited discovery on the numerosity question with an eye toward settlement, on May 7, 2010, the case was transferred to this court. (R. 56.) The parties were ordered to exchange settlement offers and to report on "whether they need additional time to negotiate a settlement or whether they need to proceed with class certification." (R. 64.) After the parties reported that their settlement discussions had been unsuccessful, on July 26, 2010, the court ordered the parties to move forward with discovery beyond the issue of numerosity. (R. 66.)

On September 15, 2010, counsel for Allscripts sent counsel for Geismann an offer of judgment pursuant to Rule 68. The offer included an agreement to the entry of judgment in the amount of $1,500 for each unsolicited fax advertisement Allscripts sent Geismann, reasonable attorneys' fees and costs, and an agreement to the entry of the injunction requested in the amended class action complaint. (R. 78-1, Ex. A.) On September 28, 2010, the day before Allscripts's offer was set to expire under Rule 68, Geismann filed a "Motion to Strike Defendants' Offer of Judgment or, in the Alternative, Amended Motion for Class Certification." (R. 72.) At a hearing on the motion, counsel for Allscripts asked for time to consider filing a motion to dismiss on mootness grounds. (R. 79-1, Ex. A at 9-10.) The court denied Geismann's motion to strike-no Rule 68 Offer had been filed with the court so there was nothing for the court to strike-but stated that the motion for class certification would remain pending until the anticipated motion to dismiss was resolved. (Id. Ex. A at 3, 10-11.) On October 29, 2010, Allscripts filed the current motion to dismiss pursuant to Rule 12(b)(1).

Analysis

In analyzing a motion to dismiss under Rule 12(b)(1), this court accepts that the allegations in the amended complaint are true, but may weigh evidence submitted by the parties to determine whether jurisdiction exists. See United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003). In the current motion, Allscripts argues that this lawsuit is moot because it offered Geismann everything it seeks to gain in this lawsuit, and Geismann refused. Under Article III of the United States Constitution, federal courts only have subject-matter jurisdiction over actual cases or controversies. Lewis v. Continental Bank Corp., 494 U.S. 472, 477 (1990). A federal court loses jurisdiction when the controversy becomes moot, which occurs "when the dispute between the parties no longer rages, or when one of the parties loses his personal stake in the outcome of the suit."

Holstein v. City of Chicago, 29 F.3d 1145, 1147 (7th Cir. 1994). In support of its motion to dismiss, Allscripts invokes the rule 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) (internal citation omitted). But as both parties acknowledge, in the class action context the impact of the offer turns on its timing. See White v. Humana Health Plan, Inc., No. 06 CV 5546, 2007 WL 1297130, at *6 (N.D. Ill. May 2, 2007). Typically, if the full-relief offer comes before the plaintiff moves for class certification, the offer eliminates the controversy, and the suit becomes moot. See Holstein, 29 F.3d at 1147. If, on the other hand, the plaintiff moves for class certification before the offer is extended, the offer does not moot the action, even if the court has not yet ruled on the motion. Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 546-47 (7th Cir. 2003). That is because during the pendency of a class-certification motion, more than the named plaintiff's interests are at stake-"at least in a limited sense, the interests of the unnamed class members are before the court." Susman v. Lincoln American Corp., 587 F.2d 866, 869 (7th Cir. 1978). In other words, after the named plaintiff seeks class certification, "an offer to one is not an offer of the entire relief sought by the suit." Griesz v. Household Bank (Illinois), 176 F.3d 1012, 1015 (7th Cir. 1999) (emphasis in original).

Recognizing that the mootness question presented here turns on the timing of the class-certification motions, the parties take widely divergent views of the impact of the class- certification motion Geismann filed in state court and the "Amended Motion for Class Certification" it filed in this court.*fn1 Allscripts points to what it characterizes as procedural and substantive defects in the state-court motion and concludes that those defects render it a "legal nullity." It also argues that the "Amended Motion"-which Geismann filed after the Rule 68 offer was extended but before it expired-was filed too late to prevent mootness. Geismann, on the other hand, argues that the motion for class certification filed in state court has been pending throughout this litigation, and that accordingly, the Rule 68 offer does not cover all of the relief sought in this lawsuit. Geismann further argues that even if the state-court motion is insufficient, the "Amended Motion" preserves his claim because it was filed before Allscripts's Rule 68 offer expired.

I. Geismann's State-Court Motion for Class Certification

Because a complete offer of judgment moots a class action only before the filing of a motion for class certification, see Griesz, 176 F.3d at 1015, Allscripts's mootness argument hinges on its assertion that the class-certification motion Geismann filed on July 17, 2009, in the Circuit Court of Cook County is a "legal nullity."*fn2 In support of this argument, Allscripts points to what it characterizes as the state-court motion's substantive and procedural defects to argue that the motion was void from the day Geismann submitted it to the court. Specifically, it argues that Geismann failed to give notice of or properly serve the motion, failed to develop a substantive argument in the motion, and abandoned the motion by not submitting a promised memorandum in support.

Allscripts has not shown that the cited procedural defects--failure to notice or properly serve the motion-deprive the state-court motion of legal effect. In response to Allscripts's assertion that the motion was not properly served, Geismann submitted uncontradicted evidence that the Cook County Sheriff's Department properly served the motion and filed proof of service in the Circuit Court, as required by Illinois Supreme Court Rule 12. Although Geismann does not dispute that it overlooked filing a notice of the motion as required by Illinois Circuit Court of Cook County Rule 2.1(b), Allscripts has not shown that this violation means that the motion was void ab initio.*fn3 On the contrary, Illinois courts view the failure to notice a motion as a "purely technical" mistake that does not waive the issues presented therein where the lack of notice does not prejudice the nonmoving party. See Stewart v. Jones, 318 Ill. App. 3d 552, 564 (2d Dist. 2001). Even where the Circuit Court issues an order on a motion that is not properly noticed, the order is not void, but merely voidable if it resulted in prejudice to the non-movant. See Savage v. Mui Pho, 312 Ill. App. 3d 553, 557 (5th Dist. 2000). ...


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