A New York federal court has held that a defendant’s payment of the amount of plaintiff’s TCPA claim plus costs to the clerk of the court required entry of judgment for the plaintiff and ended the case. Leyse v. Lifetime Entertainment Servs., LLC, Case No. 13-cv-574 (AKH) (S.D.N.Y. Mar. 17, 2016). In Campbell-Ewald v. Gomez, __ S. Ct. __ (Jan. 20, 2016), the United States Supreme Court held that a defendant’s unaccepted offer of complete relief did not moot a class plaintiff’s claim or require dismissal of the action, but left open the issue whether actual payment of the claim could do so. (See our client alert on Campbell-Ewald.)
Earlier this year, another New York federal court, the first to consider the issue after Campbell-Ewald, held that a motion and letter seeking to deposit funds with the court in the full amount of plaintiff’s claim did not permit the defendant to moot plaintiff’s claims or defeat certification. Brady v. Basic Research, L.L.C., Case No. 2:13-cv-7169 (SFJ) (E.D.N.Y. Feb. 3, 2016). (See Brady blog post.) In Leyse, however, Judge Alvin K. Hellerstein held that “once the defendant has furnished full relief, there is no basis for the plaintiff to object to entry of judgment in its favor.” Judge Hellerstein had previously denied the plaintiff’s motion for class certification and for reconsideration of that ruling.[1] In Brady, the court had not yet ruled on class certification.
In addition to paying the amount of Leyse’s claim plus costs estimated by the court, defendant Lifetime also agreed to an injunction prohibiting it from calling the plaintiff at the phone number previously called in alleged violation of the TCPA. The court reasoned that a “plaintiff has no entitlement to an admission of liability, as a party can always incur a default judgment and liability without any factual findings.” The court concluded that “if the defendant has thrown in the towel there is nothing left for the district court to do except enter judgment. The absence of a controversy in the constitutional sense precludes the court from issuing an opinion on whether the defendant actually violated the law.” Leyse thus provides a mechanism for a defendant that has defeated class certification to avoid proceeding to trial on a plaintiff’s individual claim. [2]
[1] The court stated in a footnote that entry of judgment for plaintiff would not necessarily preclude plaintiff’s subsequent appeal of the class certification ruling. The court noted that under the Supreme Court’s ruling in Deposit Guar. Nat. Bank v. Roper, 445 U.S. 326, 336 (1980), the denial of class certification is a “procedural ruling, collateral to the merits of a litigation, that is appealable after the entry of final judgment.”
[2] McCauley v. Trans Union, L.L.C., 402 F.3d 340, 342 (2d Cir. 2005), quoting Chathas v. Local 134 IBEW, 233 F.3d 508, 512 (7th Cir. 2000).