Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Fulton Dental, LLC v. Bisco, Inc.

United States Court of Appeals, Seventh Circuit

June 20, 2017

Fulton Dental, LLC, Plaintiff-Appellant,
Bisco, Inc., Defendant-Appellee.

          Argued February 21, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 15 C 11038 Edmond E. Chang, Judge.

          Before WOOD, Chief Judge, and Flaum and ROVNER, Circuit Judges.

          WOOD, Chief Judge.

         In recent years, the Supreme Court has twice addressed the question whether an unaccepted offer to a person seeking to represent a class is capable of mooting either the putative representative's claim or the claims of the class as a whole. See Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016); Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013). The case now before us presents yet another variation on that theme. Our putative class representative, Fulton Dental, LLC, received an unsolicited fax from Bisco, Inc., and it has sued for damages under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227 et seq. Before Fulton moved for class certification, Bisco tried to moot its claim by tendering an offer that (Bisco says) gives Fulton all of the individual relief it could possibly expect. This offer, however, was not submitted pursuant to Federal Rule of Civil Procedure 68, as were the offers in Genesis and Campbell-Ewald. Instead, Bisco tried to use Rule 67, which allows a party to deposit a payment with the court. The district court concluded that Bisco's maneuver was enough to moot Fulton's individual claim and to disqualify it from serving as a class representative, and so it dismissed the entire action. We conclude, however, that this step was premature, and so we return the case to the district court for further proceedings.


         Fulton's case against Bisco arose after Bisco faxed to Fulton a generic, unsolicited advertisement for its dental products. The TCPA prohibits such contacts, unless one of several exceptions applies, such as a previous business relationship or use of certain approved ways to obtain the fax number. In addition, the sender must include an opt-out notice in clear and conspicuous language. Violations of the TCPA can be redressed with statutory damages of $500 per negligent violation, or $1, 500 per willful violation. Fulton filed a complaint against Bisco on December 8, 2015. In it, Fulton sought statutory damages for two alleged violations (lack of consent and omission of the opt-out notice), injunctive relief banning future violations, and certification of a class (to be represented by Fulton) of all those who had similarly received faxes from Bisco.

         On January 18, 2016, before Fulton had filed a motion for class certification, Bisco made Fulton an offer of judgment pursuant to Federal Rule of Civil Procedure 68. The offer was for $3, 005 plus accrued costs, and it included an agreement to have the requested injunction entered against it. Two days after Bisco's offer was filed, the Supreme Court decided Camp-bell-Ewald, in which it held that "an unaccepted settlement offer or offer of judgment does not moot a plaintiff's case." 136 S.Ct. at 672. Taking its cue from that language, Fulton rejected Bisco's offer on January 24, because the offer provided no relief to the rest of the class. Bisco then tried another tack: it moved for leave to deposit $3, 600 with the district court under Rule 67. This sum represented what Bisco regarded as the maximum possible damages Fulton could receive, plus $595 for fees and costs. In light of that fact, along with its renewed acquiescence to the injunction, Bisco argued that the deposit had made Fulton's claim moot, and that the district court should thus enter judgment in Fulton's favor on the moot claims for $3, 600 plus the injunction. Fulton opposed the latter motion, on the ground that this was not a proper use of Rule 67 and that the simple deposit of funds could not moot the case.

         The district court granted Bisco's motion. It treated the Rule 67 deposit of funds as the equivalent of giving the money directly to Fulton, and it treated Bisco's offer to submit to the injunction as the equivalent of a commitment that it already had stopped sending the offending faxes. The language of mootness appears throughout the order, but the court paradoxically ordered relief on the merits. Fulton has appealed.


         If Bisco's deposit of money into the court's registry had the effect of mooting this appeal, we would be in a strange situation: there would no longer be a case or controversy between the parties, and we would need to dismiss the action on that basis. In essence, Bisco is arguing that it has forced a settlement that moots the case, along the same lines as the Supreme Court faced in U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18 (1994). There the Court held that the power to order vacatur of the lower court's decision remains, even if the case has become moot. Id. at 21. In the normal case, Bonner Mall continued, "mootness by reason of settlement does not justify vacatur of a judgment under review." Id. at 29. But the Court did not hold that the district court could take steps on the merits, as opposed to steps designed to wrap up a case such as an award of costs or a decision on vacatur. To the contrary, it said "[o]f course, no statute could authorize a federal court to decide the merits of a legal question not posed in an Article III case or controversy." Id. at 21.

         A decision that a certain amount of damages should be paid and that an injunction should be entered is quintessentially a ruling on the merits of a case. The logic of Bisco's position is that all it had to do was deposit the estimated damages with the court in order to moot the case. It overlooks the fact that once the case is moot, the court lacks power to enter any judgment on the merits. Logically, money paid into the court's registry would either stay there for five years, after which it would escheat to the United States, see 28 U.S.C. § 2042, or perhaps Bisco could ask the court to return it. Neither of those outcomes would be very satisfactory to Fulton, nor to Bisco if escheat were the result.

         Mootness, plainly is not the correct legal concept for the course of events that took place here. See Chapman v. First Index, Inc., 796 F.3d 783, 786 (7th Cir. 2015) (circulated to the full court under 7th Circuit Local Rule 40(e)). Bisco is instead talking about something more like accord and satisfaction or payment, both affirmative defenses recognized by Federal Rule of Civil Procedure 8(c)(1). Bisco insists that its Rule 67 payment somehow erased any claim that Fulton may have had against it. In order to decide whether that is true, we find it helpful to take a closer look at Campbell-Ewald, which intimated that such a payment might have legal effects.

         The question before the Court was whether "an unaccepted offer to satisfy the named plaintiff's individual claim [is] sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated." Campbell-Ewald, 136 S.Ct. at 666. Notably, nothing in this question is necessarily limited to a settlement offer presented pursuant to Federal Rule of Civil Procedure 68, which sets out special rules that include the "stick" of liability for post-offer costs for an offeree who gambles on trial and wins less than the offer. See Fed.R.Civ.P. 68(d). To the contrary, the Court drew no distinction between ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.