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G. Neil Garrett, D.D.S, P.C. v. New Albertson's, Inc.

United States District Court, N.D. Illinois, Eastern Division

May 27, 2014

G. NEIL GARRETT, D.D.S., P.C., on behalf of plaintiff and the class members defined herein, Plaintiff,
NEW ALBERTSON'S, INC., doing business as Jewel-Osco, and JOHN DOES 1-10, Defendants.


JOHN F. GRADY, District Judge.

Before the court is the motion of defendant New Albertson's, Inc. ("New Albertson's") to dismiss the First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) or, in the alternative, to dismiss Counts II through V pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons explained below, the motion is granted in part and denied in part.


Plaintiff, G. Neil Garrett, D.D.S., P.C., is an Illinois professional corporation. It alleges that on November 5, 2013, defendant New Albertson's, doing business as Jewel-Osco, sent it via facsimile machine an unsolicited advertisement for the Jewel-Osco pharmacy. Plaintiff, who seeks to represent a class, claims that in sending the unsolicited fax, New Albertson's and the "John Doe" defendants-agents of New Albertson's who are alleged to have been involved-violated the Telephone Consumer Protection Act (the "TCPA"), 47 U.S.C. ยง 227.[1] The First Amended Complaint also alleges state-law claims for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 ("Consumer Fraud Act") (Count II); conversion (Count III); private nuisance (Count IV); and trespass to chattels (Count V).

New Albertson's moves to dismiss the First Amended Complaint for lack of jurisdiction. In the alternative, it moves to dismiss plaintiff's state-law claims for failure to state a claim.


A. Rule 12(b)(1)

When considering a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, a district court accepts as true all well-pleaded factual allegations and draws reasonable inferences from the allegations in favor of the plaintiff. Capitol Leasing Co. v. FDIC , 999 F.2d 188, 191 (7th Cir. 1993). The court may also look beyond the allegations of the complaint and consider affidavits and other documentary evidence to determine whether subject matter jurisdiction exists. Id.

New Albertson's argues that because it made a settlement offer that provided plaintiff with "everything it would be entitled to had it prevailed in this action" and the offer was made before plaintiff filed a motion for class certification regarding New Albertson's, this lawsuit is moot. (Def.'s Mem. in Supp. of Mot. to Dismiss at 3.) The doctrine of mootness stems from Article III of the United States Constitution, which limits the subject matter jurisdiction of federal courts to live cases or controversies. Damasco v. Clearwire Corp. , 662 F.3d 891, 894-95 (7th Cir. 2011) (citing, inter alia, Spencer v. Kemna , 523 U.S. 1, 7 (1998)). "The doctrine demands that the parties to a federal case maintain a personal stake in the outcome at all stages of the litigation." Damasco , 662 F.3d at 894-95. "[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." Id. at 895 (quoting Rand v. Monsanto Co. , 926 F.2d 596, 598 (7th Cir. 1991)).

Plaintiff filed its original complaint in this action on November 6, 2013 against "Albertson's, LLC" and the John Does. Along with the complaint, plaintiff filed a motion for class certification. Albertson's, LLC was served with the complaint on November 8, 2013. Apparently, Albertson's, LLC was not the correct defendant, because on November 21, 2013, plaintiff's counsel received an e-mail from counsel for "New Albertson's, Inc." The e-mail states: "We represent New Albertson's Inc. and we have received information that G. Neil Garrett, D.D.S., P.C. may have received an unsolicited facsimile advertisement sent by or on behalf of New Albertson's Inc. Therefore New Albertson's Inc. makes the settlement offer to G. Neil Garrett, D.D.S., P.C. which is contained in the attached letter...." (Def.'s Mem. in Supp. of Mot. to Dismiss, Ex. B.) The attached three-page letter contained the settlement offer. (Def.'s Mem. in Supp. of Mot., Ex. A.) The parties disagree about whether the offer provided plaintiff complete relief. Plaintiff did not accept the offer, and thereafter, on November 25, 2013, it filed the First Amended Complaint, substituting New Albertson's as the defendant, and an amended motion for class certification.

New Albertson's contends that "before Plaintiff even named New Albertson's as the defendant in this action, and before Plaintiff moved to certify a class as to New Albertson's, Inc., " it made a complete offer of relief to plaintiff, thereby mooting plaintiff's claims. (Def.'s Mem. in Supp. of Mot. at 2-5.) In support of its motion, New Albertson's cites Damasco. Damasco had filed a putative class-action suit for violation of the TCPA, but before he moved for class certification, the defendant offered him his full request for relief. The Seventh Circuit agreed with the district court and the defendant that the offer mooted Damasco's claim and therefore ended the putative class action. 662 F.3d at 895-97.

In our view, Damasco does not apply to the instant case. Damasco is premised on the principle set forth in Rand , 926 F.2d at 598, that "once the defendant offers to satisfy the plaintiff's entire demand, there is no dispute over which to litigate." 662 F.3d at 895 (emphasis added). Here, as New Albertson's itself repeatedly emphasizes in its briefs, New Albertson's was not yet a defendant to this action when it made its offer to plaintiff. (See, e.g., Def.'s Reply at 1 ("[New Albertson's] made a complete settlement offer to Plaintiff prior to the time that Plaintiff even filed a lawsuit against New Albertson's.").) There was not yet a demand directed to New Albertson's for it to offer to satisfy. And an offer to "pay only what [the defendant] thinks might be due" does not render a plaintiff's case moot. Scott v. Westlake Servs. LLC , 740 F.3d 1124, 1126 (7th Cir. 2014) (discussing Damasco and further remarking: "The plaintiff's stake is negated only if no additional relief is possible.... To hold otherwise would imply that any reasonable settlement offer moots the plaintiff's case or that long-shot claims are moot rather than unlikely to succeed.").

Our conclusion is bolstered by the Court of Appeals's response in Damasco to the plaintiff's concern about allowing "buy-offs" to frustrate the objectives of class actions. The Court remarked:

Damasco starts by highlighting that the Supreme Court and this court have emphasized the importance of preventing individual buy-offs from mooting class actions. For example, the Supreme Court has held that defendants cannot prevent an appeal from a denial of certification simply by offering relief to a named plaintiff. The Court reasoned that the alternative-requiring numerous plaintiffs to file separate actions in order to prevent them from being picked off before appellate review of certification-"would frustrate the objectives of class actions" and "invite waste of judicial resources by stimulating successive suits brought by others claiming aggrievement." Along the same lines, we have long held that a defendant cannot moot a case by ...

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