Richard Chen v. Allstate Insurance Co. , 819 F.3d 1136 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICHARD CHEN; FLORENCIO No. 13-16816
PACLEB, on behalf of themselves and
all others similarly situated, D.C. No.
Plaintiffs-Appellees, 4:13-cv-00685-
PJH
v.
ALLSTATE INSURANCE COMPANY, OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, Chief District Judge, Presiding
Argued and Submitted
March 22, 2016—San Francisco, California
Filed April 12, 2016
Before: Barry G. Silverman, Raymond C. Fisher
and Richard C. Tallman, Circuit Judges.
Opinion by Judge Fisher
2 CHEN V. ALLSTATE INS. CO.
SUMMARY*
Mootness / Offers of Judgment
The panel affirmed the district court’s denial of a motion
to dismiss a putative class action under the Telephone
Consumer Protection Act as moot following defendant’s
unaccepted offer of judgment on a plaintiff’s individual
claims under Federal Rule of Civil Procedure 68.
The panel held that the case was not moot because first,
even if the district court entered judgment affording the
plaintiff complete relief on his individual claims for damages
and injunctive relief, mooting those claims, he would still be
able to seek class certification under Pitts v. Terrible Herbst,
Inc., 653 F.3d 1081 (9th Cir. 2011), which remains good law
pursuant to Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th
Cir. 2014), aff’d, 136 S. Ct. 663 (2016). Second, even if Pitts
were not binding, and the defendant could moot the entire
action by mooting the plaintiff’s individual claims, the
individual claims were not yet moot because the plaintiff had
not yet actually received relief. The panel held that it would
not direct the district court to enter judgment, over the
plaintiff’s objections, on his individual claims when he had
not yet had a fair opportunity to move for class certification.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
CHEN V. ALLSTATE INS. CO. 3
COUNSEL
Mark J. Levin (argued), Ballard Spahr LLP, Philadelphia,
Pennsylvania; Daniel M. Benjamin, Ballard Spahr LLP, San
Diego, California; and Scott M. Pearson, Ballard Spahr LLP,
Los Angeles, California, for Defendant-Appellant.
F. Paul Bland, Jr. (argued) and Claire Prestel, Public Justice,
P.C., Washington, D.C.; Abbas Kazerounian, Kazerouni Law
Group, APC, Costa Mesa, California; Joshua B. Swigart,
Hyde & Swigart, San Diego, California; Todd M. Friedman,
Law Offices of Todd Friedman, P.C., Beverly Hills,
California; and Spencer J. Wilson, Public Justice, P.C.,
Oakland, California, for Plaintiffs-Appellees.
Kate Comerford Todd and Tyler R. Green, Chamber of
Commerce of the U.S., Washington, D.C.; Eric J. Ellman,
Consumer Data Industry Association, Washington, D.C.;
Theodore J. Boutrous Jr., Gibson, Dunn & Crutcher LLP, Los
Angeles, California; Robert E. Dunn, Gibson, Dunn &
Crutcher LLP, Palo Alto, California; and Gregory G. Garre,
Latham & Watkins LLP, Washington, D.C., for Amici Curiae
Chamber of Commerce of the United States and Consumer
Data Industry Association.
Timothy Sandefur and Anastasia P. Boden, Pacific Legal
Foundation, Sacramento, California, for Amicus Curiae
Pacific Legal Foundation.
James M. Nelson, Greenberg Traurig, LLP, Sacramento,
California; James N. Boudreau, Greenberg Traurig, LLP,
Philadelphia, Pennsylvania; Thomas S. Knox, Knox Lemmon
& Anapolsky, LLP, Sacramento, California; and John F.
Farraher, Jr., Greenberg Traurig, LLP, Boston,
4 CHEN V. ALLSTATE INS. CO.
Massachusetts, for Amicus Curiae California Retailers
Association.
James C. Sturdevant, The Sturdevant Law Firm, San
Francisco, California, for Amicus Curiae National
Association of Consumer Advocates.
Scott L. Nelson, Allison M. Zieve, and Adina H. Rosenbaum,
Public Citizen Litigation Group, Washington, D.C., for
Amicus Curiae Public Citizen, Inc.
OPINION
FISHER, Circuit Judge:
Florencio Pacleb filed a class action complaint against
Allstate Insurance Company, alleging he received unsolicited
automated telephone calls to his cellular telephone, in
violation of the Telephone Consumer Protection Act. Taking
a cue from a recent Supreme Court case, Campbell-Ewald
Co. v. Gomez, 136 S. Ct. 663 (2016) (“Campbell-Ewald”), on
appeal Allstate deposited $20,000 in full settlement of
Pacleb’s individual monetary claims in an escrow account
“pending entry of a final District Court order or judgment
directing the escrow agent to pay the tendered funds to
Pacleb, requiring Allstate to stop sending non-emergency
telephone calls and short message service messages to Pacleb
in the future and dismissing this action as moot.” On the
basis of these actions, Allstate argues we should “reverse the
denial of Allstate’s motion to dismiss for lack of subject
matter jurisdiction and remand to the District Court to order
disbursement of the tendered funds to Pacleb, the entry of
CHEN V. ALLSTATE INS. CO. 5
judgment in favor of Pacleb and the dismissal of this action
as moot.” We disagree.
First, even if the district court entered judgment affording
Pacleb complete relief on his individual claims for damages
and injunctive relief, mooting those claims, Pacleb would still
be able to seek class certification under Pitts v. Terrible
Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011). Although
Allstate argues Pitts is no longer good law after Genesis
Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), we
rejected that very argument in Gomez v. Campbell-Ewald
Co., 768 F.3d 871 (9th Cir. 2014) (“Gomez”), aff’d, 136 S. Ct.
663 (2016). Pitts therefore remains the law of this circuit.1
Second, even if Pitts were not binding, and Allstate could
moot the entire action by mooting Pacleb’s individual claims
for damages and injunctive relief, those individual claims are
not now moot, and we will not direct the district court to
moot them by entering judgment on them before Pacleb has
had a fair opportunity to move for class certification. Under
Supreme Court and Ninth Circuit case law, a claim becomes
moot when a plaintiff actually receives complete relief on
that claim, not merely when that relief is offered or tendered.
Where, as here, injunctive relief has been offered, and funds
have been deposited in an escrow account, relief has been
offered, but it has not been received. Pacleb’s individual
claims, therefore, are not now moot. Nor will we direct the
district court to moot them. Assuming arguendo a district
court could enter a judgment according complete relief on a
plaintiff’s individual claims over the plaintiff’s objections,
1
In Campbell-Ewald, 136 S. Ct. 663, the Supreme Court affirmed
Gomez, but did not address the continuing validity of Pitts. Gomez’s
holding on this issue, therefore, remains binding in this circuit.
6 CHEN V. ALLSTATE INS. CO.
thereby mooting those claims, such action is not appropriate
here. As the Supreme Court said in Campbell-Ewald, 136 S.
Ct. at 672, “[w]hile a class lacks independent status until
certified, see Sosna v. Iowa, 419 U.S. 393, 399 (1975), a
would-be class representative with a live claim of her own
must be accorded a fair opportunity to show that certification
is warranted.” Because Pacleb has not yet had a fair
opportunity to move for class certification, we will not direct
the district court to enter judgment, over Pacleb’s objections,
on his individual claims.
For the above reasons, we affirm the order denying
Allstate’s motion to dismiss for lack of subject matter
jurisdiction.
BACKGROUND
In 2013, Richard Chen and Florencio Pacleb filed a class
action complaint against Allstate Insurance Company,
asserting violations of the Telephone Consumer Protection
Act (TCPA). The TCPA makes it unlawful, in part, “to make
any call (other than a call made for emergency purposes or
made with the prior express consent of the called party) using
any automatic telephone dialing system or an artificial or
prerecorded voice . . . to any telephone number assigned to a
. . . cellular telephone service, . . . unless such call is made
solely to collect a debt owed to or guaranteed by the United
States.” 47 U.S.C. § 227(b)(1)(A). An aggrieved person may
bring an action to enjoin a violation of this provision or to
seek actual or statutory damages. See id. § 227(b)(3).
Statutory damages are $500 per violation. See id.
§ 227(b)(3)(B). If a violation is willful or knowing, a court
may treble the award. See id. § 227(b)(3).
 CHEN V. ALLSTATE INS. CO. 7
Chen alleged he received eight calls from Allstate in
violation of § 227(b)(1)(A). Pacleb alleged he received five
such calls. In Pacleb’s case, the automated calls asked for an
individual named Frank Arnold. Chen and Pacleb brought
their claims “on behalf of themselves and all others similarly
situated,” as members of a proposed class defined as:
All persons within the United States who
received any telephone calls from Defendant
to said person’s cellular telephone made
through the use of any automatic telephone
dialing system and such person had not
previously consented to receiving such calls
within the four years prior to the filing of this
Complaint.
In their first cause of action, for negligent violations of the
TCPA, Chen and Pacleb sought for themselves and the
members of the proposed class $500 in statutory damages for
each violation and injunctive relief prohibiting such conduct
in the future. In their second cause of action, for knowing or
willful violations of the TCPA, they sought $1500 in statutory
damages for each violation and similar injunctive relief. The
plaintiffs subsequently abandoned their claims for knowing
or willful violations of the TCPA.
In April 2013, before any motion for class certification
had been made, Allstate made an offer of judgment to Chen
and Pacleb under Rule 68 of the Federal Rules of Civil
Procedure. Allstate offered to allow judgment to be taken
against it by Chen and Pacleb “on their individual claims in
the amount of $15,000.00 and $10,000.00, respectively,
together with reasonable attorneys’ fees and costs that have
been accrued to date.” With respect to Chen and Pacleb’s
8 CHEN V. ALLSTATE INS. CO.
demand for injunctive relief, Allstate agreed “to stop sending
non-emergency telephone calls and short message service
messages to [them] in the future.” The offer was made
“solely for the purposes specified in Rule 68” and provided
Chen and Pacleb 14 days to accept the offer in writing. The
offer also directed Chen’s and Pacleb’s “attention to the
provision of Rule 68 that provides that ‘[i]f the judgment
finally obtain[ed] [by Plaintiffs] is not more favorable than
[Allstate’s] offer, the [Plaintiffs] must pay the costs incurred
after the offer was made’” (alterations in original) (quoting
Fed. R. Civ. P. 68(d)).
When Chen and Pacleb did not accept the offer within 14
days, Allstate sent plaintiffs’ counsel a letter purporting to
extend the “offer of judgment until such time as it is accepted
by plaintiffs or Allstate withdraws the offer in writing” and,
the next day, moved to dismiss the complaint for lack of
subject matter jurisdiction. Allstate argued “Plaintiffs’ claims
are moot because Allstate (without admitting liability) made
an offer of judgment under Fed. R. Civ. P. 68 in an amount
that is more than sufficient to satisfy all of Plaintiffs’ alleged
individual damages and non-monetary requests for relief.” In
Allstate’s view, “[o]nce the defendant offers to satisfy the
plaintiff’s entire demand, there is no dispute 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.” The plaintiffs’ class claims “should also be dismissed
as moot” because “no class certification motion has been
filed.” Allstate urged the court to enter judgment of dismissal
“in its favor and against Plaintiffs with prejudice.” While the
motion to dismiss was pending, Chen accepted Allstate’s
Rule 68 offer. Pacleb did not.
CHEN V. ALLSTATE INS. CO. 9
The district court denied Allstate’s motion to dismiss.
The court did not squarely address whether Allstate’s Rule 68
offer provided complete relief on Pacleb’s individual claims
for damages and injunctive relief. Nor did the court
determine whether such an offer, if unaccepted, would moot
Pacleb’s individual claims. Instead, the court relied on this
court’s decision in Pitts v. Terrible Herbst, Inc., 653 F.3d
1081 (9th Cir. 2011), to hold that, even if Pacleb’s individual
claims could be considered fully satisfied by the offer, the
action as a whole continued to present a justiciable
controversy affording Pacleb an opportunity to move for class
certification. In doing so, the court rejected Allstate’s
argument that Pitts was no longer good law in light of the
Supreme Court’s intervening decision in Genesis Healthcare.
The district court subsequently granted Allstate’s motion to
certify the order for interlocutory appeal under 28 U.S.C.
§ 1292(b), stating the court “would welcome the Ninth
Circuit’s view as to whether its Pitts decision remains good
law in light of Genesis Healthcare.” We granted permission
to appeal. While the appeal was pending, we decided Gomez,
768 F.3d at 875–76, holding Pitts remains the law of this
circuit after Genesis Healthcare.
Also while this appeal was pending, the Supreme Court
decided Campbell-Ewald. Campbell-Ewald confirmed that
“an unaccepted settlement offer has no force.” 136 S. Ct. at
666. “Like other unaccepted contract offers, it creates no
lasting right or obligation.” Id. “With the offer off the table,
and the defendant’s continuing denial of liability, adversity
between the parties persists.” Id.2 Thus, an unaccepted offer
2
In its initial briefing in this court, Allstate attempted to distinguish this
case from Diaz v. First American Home Buyers Protection Corp.,
732 F.3d 948 (9th Cir. 2013) (holding an unaccepted Rule 68 offer does
10 CHEN V. ALLSTATE INS. CO.
to satisfy the named plaintiff’s individual claim is insufficient
“to render a case moot when the complaint seeks relief on
behalf of the plaintiff and a class of persons similarly
situated.” Id. The Court also declined to “decide whether the
result would be different if a defendant deposits the full
amount of the plaintiff’s individual claim in an account
payable to the plaintiff, and the court then enters judgment for
the plaintiff in that amount.” Id. at 672. The Court expressly
reserved this question “for a case in which it is not
hypothetical.” Id.
Allstate seeks to take up that hypothetical here. Shortly
after the Supreme Court issued Campbell-Ewald, Allstate
deposited $20,000 in a bank escrow account “pending entry
of a final District Court order or judgment directing the
escrow agent to pay the tendered funds to Pacleb, requiring
Allstate to stop sending non-emergency telephone calls and
short message service messages to Pacleb in the future and
dismissing this action as moot.”3 Allstate argues this action
not moot a claim), on the ground that Diaz involved an expired offer of
judgment, whereas Allstate purported to hold its Rule 68 offer open.
Following the Supreme Court’s decision in Campbell-Ewald, however,
Allstate has not continued to press that argument, and properly so. Under
Campbell-Ewald, the key question is whether an offer has been accepted,
regardless of whether it has lapsed or remains on the table. See Campbell-
Ewald, 136 S. Ct. at 666 (“We hold today, in accord with Rule 68 of the
Federal Rules of Civil Procedure, that an unaccepted settlement offer has
no force.” (emphasis added)); id. at 672 (holding “an unaccepted
settlement offer or offer of judgment does not moot a plaintiff’s case”
(emphasis added)).
3
We grant Allstate’s motion to supplement the record on appeal to
include the escrow documents. See Johnson v. Rancho Santiago Cmty.
Coll. Dist., 623 F.3d 1011, 1020 n.3 (9th Cir. 2010) (“Because the new
facts that the defendants seek to establish bear on whether the controversy
CHEN V. ALLSTATE INS. CO. 11
on the part of the district court would moot Pacleb’s
individual claims. It further contends that, because Pitts no
longer remains good law, the existence of Pacleb’s class
claims do not preserve a justiciable controversy.
Accordingly, Allstate urges us to “reverse the denial of
Allstate’s motion to dismiss for lack of subject matter
jurisdiction and remand to the District Court to order
disbursement of the tendered funds to Pacleb, the entry of
judgment in favor of Pacleb and the dismissal of this action
as moot.”
STANDARD OF REVIEW
We review de novo the denial of a motion to dismiss for
lack of subject matter jurisdiction. See Botosan v. Paul
McNally Realty, 216 F.3d 827, 830 (9th Cir. 2000).
DISCUSSION
Allstate’s theory of mootness turns on three contentions:
(1) that the judgment it has consented to would afford Pacleb
complete relief on his individual claims for damages and
injunctive relief; (2) that the district court should be required
to enter judgment on these terms, and that, once the court
does so, Pacleb’s individual claims will become moot; and
(3) assuming Pacleb’s individual claims become moot, the
existence of his class allegations will be insufficient to
preserve a live controversy. As explained below, we agree
with Allstate’s first contention, but reject its second and third
arguments.
before us is moot, we exercise our discretion to supplement the record on
appeal so that we may determine whether we have jurisdiction . . . .”).
12 CHEN V. ALLSTATE INS. CO.
A. Complete Relief
Pacleb argues the judgment Allstate has consented to
would not afford him complete relief on his individual claims
for damages and injunctive relief, because Allstate has neither
admitted liability nor offered sufficiently broad injunctive
relief. We disagree.
1. Admission of Liability
Pacleb contends Allstate has not agreed to complete relief
because the judgment it has consented to would not include
an admission of liability. Because his complaint alleges
Allstate violated the TCPA, he maintains he “has an interest
in a finding of liability by a court, or an admission of liability
from Allstate, on those legal allegations.”
Pacleb, however, has not explained why, under the
circumstances of this case, an admission of liability is
necessary to afford him complete relief on his non-class
claims. Pacleb’s complaint sought only statutory damages
and injunctive relief, not an admission of liability or a
declaration that Allstate violated his rights. When a plaintiff
has received “all the relief [he] could win on the merits,” an
adjudication would have no “consequences on remaining
related disputes between the parties” and “nothing further
would be ordered by the court, there is no point in proceeding
to decide the merits.” 13B Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 3533.2 (3d ed.
2015). See Already, LLC v. Nike, Inc., 133 S. Ct. 721,
726–33 (2013) (holding a covenant not to sue mooted a
counterclaim of trademark invalidity, notwithstanding the
lack of an admission or finding of liability); McCauley v.
Trans Union, LLC, 402 F.3d 340, 342 (2d Cir. 2005) (holding
CHEN V. ALLSTATE INS. CO. 13
a plaintiff “is not entitled to keep litigating his claim simply
because [the defendant] has not admitted liability”).
2. Scope of Injunctive Relief
Pacleb alternatively contends Allstate has not agreed to
complete relief on his individual claims because the judgment
to which it has consented would not provide the full scope of
injunctive relief he seeks in his complaint. He argues,
“[g]iven the fact that [he] received calls from Allstate looking
for a ‘Mr. Arnold,’ errors in Allstate’s phone records leave
reason to doubt that a narrow injunction merely requiring
Allstate to refrain from calling [him] would be effective.”
According to Pacleb, only a nationwide injunction enjoining
Allstate from all violations of § 227(b)(1)(A) will afford him
effective relief.
Pacleb is correct that he is not necessarily precluded from
obtaining nationwide injunctive relief:
While injunctive relief generally should be
limited to apply only to named plaintiffs
where there is no class certification, “an
injunction is not necessarily made overbroad
by extending benefit or protection to persons
other than prevailing parties in the lawsuit –
even if it is not a class action – if such breadth
is necessary to give prevailing parties the
relief to which they are entitled.”
Easyriders Freedom F.I.G.H.T. v. Hannigan, 92 F.3d 1486,
1501–02 (9th Cir. 1996) (citation omitted) (quoting Bresgal
v. Brock, 843 F.2d 1163, 1170–71 (9th Cir. 1987)). Here,
however, Pacleb has given us no reason to believe the
14 CHEN V. ALLSTATE INS. CO.
injunctive relief to which Allstate has consented would be
inadequate, or that he could obtain broader relief after a trial
on the merits. Allstate, therefore, has consented to all the
injunctive relief to which Pacleb individually is entitled.
B. Continuing Validity of Pitts
In Allstate’s view, if it is able to fully satisfy Pacleb’s
individual claims, the action as a whole will also be moot.
We disagree. Even if, as Allstate proposes, the district court
were to enter judgment providing complete relief on Pacleb’s
individual claims for damages and injunctive relief before
class certification, fully satisfying those individual claims,
Pacleb still would be entitled to seek certification. In Pitts,
653 F.3d at 1091, we observed that a named plaintiff’s claim
is “transitory in nature and may otherwise evade review” in
light of a defendant’s tactic of “picking off” lead plaintiffs to
avoid a class action. As a leading treatise explains, “[t]o the
extent that defendants may avoid a class action by ‘picking
off’ the named plaintiffs, the class claims are ‘inherently
transitory’ and evade review, making an exception to the
mootness rule appropriate.” 5 James Wm. Moore, Moore’s
Federal Practice § 23.64[1][b] (3d ed. 2016). Accordingly,
we held
an unaccepted Rule 68 offer of judgment – for
the full amount of the named plaintiff’s
individual claim and made before the named
plaintiff files a motion for class certification –
does not moot a class action. If the named
plaintiff can still file a timely motion for class
certification, the named plaintiff may continue
to represent the class until the district court
decides the class certification issue. Then, if
CHEN V. ALLSTATE INS. CO. 15
the district court certifies the class,
certification relates back to the filing of the
complaint. Once the class has been certified,
the case may continue despite full satisfaction
of the named plaintiff’s individual claim
because an offer of judgment to the named
plaintiff fails to satisfy the demands of the
class. See Sosna, 419 U.S. at 402–03.
Conversely, if the district court denies class
certification, under [Deposit Guaranty
National Bank v. Roper, 445 U.S. 326
(1980),] and [U.S. Parole Commission v.
Geraghty, 445 U.S. 388 (1980)], the plaintiff
may still pursue a limited appeal of the class
certification issue. Only once the denial of
class certification is final does the defendant’s
offer – if still available – moot the merits of
the case because the plaintiff has been offered
all that he can possibly recover through
litigation.
Pitts, 653 F.3d at 1091–92 (footnote omitted).4
Allstate argues Pitts is no longer good law in light of the
Supreme Court’s intervening decision in Genesis Healthcare,
which questioned the application of “the ‘inherently
transitory’ relation-back rationale” to circumstances in which
the transitory nature of the claim arises from “the defendant’s
4
Pitts assumed without deciding that a mere offer of complete relief on
a named plaintiff’s individual claim was sufficient to moot that claim.
Subsequent decisions make clear this is not the case. See Campbell-
Ewald, 136 S. Ct. at 666; Gomez, 768 F.3d at 874–75; Diaz, 732 F.3d at
954–44.
16 CHEN V. ALLSTATE INS. CO.
litigation strategy” rather than “the fleeting nature of the
challenged conduct giving rise to the claim.” 133 S. Ct. at
1531. In Gomez, 768 F.3d at 875–76, however, we squarely
rejected that very argument. Because Genesis Healthcare
concerned collective actions brought under the Fair Labor
Standards Act (FLSA) rather than class actions under Federal
Rule of Civil Procedure 23, Gomez held Pitts was not clearly
irreconcilable with Genesis Healthcare. See id. Although
Genesis Healthcare “undermined some of the reasoning
employed in Pitts . . . , courts have universally concluded that
the Genesis discussion does not apply to class actions.” Id.
at 875. “In fact, Genesis itself emphasizes that ‘Rule 23
[class] actions are fundamentally different from collective
actions under the FLSA.’” Id. at 875–76 (alteration in
original) (quoting Genesis Healthcare, 133 S. Ct. at 1529).
Because Gomez’s holding that Pitts is not clearly
irreconcilable with Genesis Healthcare is not itself clearly
irreconcilable with intervening Supreme Court authority, we
are bound by Gomez. See Miller v. Gammie, 335 F.3d 889,
892–93 (9th Cir. 2003) (en banc) (holding “a three-judge
panel may [not] reexamine normally controlling circuit
precedent in the face of an intervening United States Supreme
Court decision” unless “the reasoning or theory of our prior
circuit authority is clearly irreconcilable with the reasoning or
theory of intervening higher authority”). Accordingly, Pitts
remains the law of this circuit. Under Pitts, even assuming
Allstate could fully satisfy Pacleb’s individual claims, Pacleb
still would be able to seek class certification.
C. Effect of Allstate’s Actions
Furthermore, even if Pitts were not controlling, we would
reject Allstate’s attempt to moot this action before Pacleb has
CHEN V. ALLSTATE INS. CO. 17
had a fair opportunity to seek certification. That is, even if
Allstate could moot the entire action by getting the district
court to enter judgment in favor of Pacleb on his individual
claims before he has had a fair opportunity to move for
certification, we would decline Allstate’s invitation to direct
the district court to take that action.
As noted, Allstate recently deposited $20,000 in escrow
and proposed entry of judgment favorable to Pacleb on his
individual claims for damages and injunctive relief. Allstate
contends its actions invoke the hypothetical question reserved
in Campbell-Ewald – whether a case becomes moot when “a
defendant deposits the full amount of the plaintiff’s
individual claim in an account payable to the plaintiff, and the
court then enters judgment for the plaintiff in that amount.”
136 S. Ct. at 672. Allstate argues we must direct the district
court to enter judgment and dismiss both Pacleb’s individual
claims and the action as a whole as moot.
1. Allstate’s Actions to Date Do Not Afford Pacleb
Any Actual Relief and Thus Do Not Moot His
Individual Claims for Damages and Injunctive
Relief
As an initial matter, Allstate does not dispute that its
actions to date – depositing $20,000 in escrow on Pacleb’s
individual damages claim and agreeing to an injunction on his
individual injunctive relief claim – do not afford Pacleb any
actual relief, and thus do not moot his individual claims for
damages and injunctive relief.
As we read Campbell-Ewald, a lawsuit – or an individual
claim – becomes moot when a plaintiff actually receives all
of the relief he or she could receive on the claim through
18 CHEN V. ALLSTATE INS. CO.
further litigation. Campbell-Ewald cited a trio of railroad
cases that reenforce this view. In San Mateo County v.
Southern Pacific Railroad Co., 116 U.S. 138, 141 (1885), the
county sued the railroad for unpaid taxes and the railroad paid
the county a sum exceeding the taxes, penalties, attorney’s
fees and interest sought in the lawsuit. Noting the “debt for
which the suit was brought has been unconditionally paid and
satisfied,” the Supreme Court dismissed the appeal, holding
“there is no longer an existing cause of action in favor of the
county against the railroad company.” Id. at 141–42. In
Little v. Bowers, 134 U.S. 547 (1890), the taxes in dispute
again were fully paid while the appeal was pending. Relying
on San Mateo County, the Court dismissed the appeal due to
the absence of an “actual controversy, involving real and
substantial rights, between the parties.” Id. at 556–58. In
California v. San Pablo & Tulare Railroad Co., 149 U.S. 308
(1893), California sued the railroad to recover taxes. The
railroad tendered to the state a sum of money equal to the
taxes, penalties, interest and attorney’s fees at issue in the
litigation. See id. at 311–12. Although the state did not
accept the tender, the railroad deposited the funds in a bank
in accordance with a state law making such a deposit
equivalent to actual payment. See id. at 312.5 The Supreme
Court dismissed the appeal:
[T]here can be no doubt that this writ of error
must be dismissed, because the cause of
5
Under the statute, “[a]n obligation for the payment of money is
extinguished by a due offer of payment, if the amount is immediately
deposited in the name of the creditor, with some bank of deposit within
this State of good repute, and notice thereof is given to the creditor.” San
Pablo, 149 U.S. at 312 (quoting Cal. Civ. Code § 1500) (internal quotation
marks omitted).
CHEN V. ALLSTATE INS. CO. 19
action has ceased to exist. Any obligation of
the defendant to pay to the State the sums
sued for in this case, together with interest,
penalties and costs, has been extinguished by
the offer to pay all these sums, and the deposit
of the money in a bank, which by a statute of
the State have the same effect as actual
payment and receipt of the money. And the
State has obtained everything that it could
recover in this case by a judgment of this
court in its favor.
Id. at 313–14.
Our own decisions are consistent with this view: a claim
becomes moot once the plaintiff actually receives all of the
relief to which he or she is entitled on the claim. See, e.g.,
Back v. Sebelius, 684 F.3d 929, 933 (9th Cir. 2012) (“Because
the Secretary has already created the administrative appeals
process that Back seeks, ‘no present controversy exists as to
which [we] can grant effective relief.’” (alteration in original)
(quoting Vegas Diamond Props., LLC v. FDIC, 669 F.3d 933,
936 (9th Cir. 2012)).6
6
See also S. Cal. Painters & Allied Trades, Dist. Council No. 36 v.
Rodin & Co., 558 F.3d 1028, 1035–36 (9th Cir. 2009) (a claim for
damages was moot where the back union dues sought in the action had
been fully paid); Ruvalcaba v. City of Los Angeles, 167 F.3d 514, 520–21
(9th Cir. 1999) (where claims against a police officer had been fully
satisfied, the plaintiff’s claims regarding whether the officer’s actions
were unconstitutional were moot); Sohappy v. Hodel, 911 F.2d 1312, 1321
(9th Cir. 1990) (a claim the government had broken agreements to replace
fishing lands destroyed by a dam was mooted by the acquisition of
replacement lands “satisfying the plaintiffs’ demands”); Carter v.
Veterans Admin., 780 F.2d 1479, 1481 (9th Cir. 1986) (where plaintiff’s
20 CHEN V. ALLSTATE INS. CO.
Under this line of cases, Pacleb’s individual claims for
damages and injunctive relief are not now moot. “A case
becomes moot only when it is impossible for a court to grant
‘any effectual relief whatever to the prevailing party.’” Knox
v. Serv. Emps. Int’l Union, Local 1000, 132 S. Ct. 2277, 2287
(2012) (quoting Erie v. Pap’s A.M., 529 U.S. 277, 287
(2000)). Here, Pacleb has not yet received any relief on his
individual claims for damages or injunctive relief. His claims
are wholly unsatisfied, and it remains entirely possible for a
court to grant him effectual relief. See Campbell-Ewald,
136 S. Ct. at 672. At this moment, therefore, Allstate’s
actions plainly have not mooted Pacleb’s individual claims.
Under the common law doctrine of tender, there may have
been occasions when the deposit of money in court could be
“treated as the equivalent of an actual payment to and
acceptance by the plaintiff.” Robert G. Bone, “To Encourage
Settlement”: Rule 68, Offers of Judgment, and the History of
the Federal Rules of Civil Procedure, 102 Nw. U.L. Rev.
1561, 1585 (2008). At most, however, that principle applied
when the defendant unconditionally relinquished its entire
interest in the deposited funds. See id. at 1586 (“The money
became the plaintiff’s property as soon as it was deposited
and remained the plaintiff’s property even if the defendant
won at trial. As one commentator put it, ‘the defendant bids
his money an eternal farewell.’” (quoting H. Gerald Chapin,
Code Practice in New York 164 (1918))). That has not
occurred here. Allstate has neither deposited the $20,000 in
the court nor unconditionally relinquished its interest in the
complaint sought injunctive relief directing a government agency to
provide documents he requested under the Freedom of Information Act,
the claim was mooted when the agency voluntarily mailed copies of the
documents to the plaintiff).
CHEN V. ALLSTATE INS. CO. 21
$20,000 to Pacleb. On the contrary, Allstate retains its
interest in the funds unless and until the district court
dismisses this entire action as moot. See Def.-Appellant
Allstate Ins. Co.’s Mot. Suppl. Appellate R. 4-5, ECF No. 80
(“The tendered funds have been deposited in an escrow
account at The Bank of New York Mellon (the ‘Bank’)
pending entry of a final District Court order or judgment
directing the escrow agent to pay the tendered funds to
Pacleb, requiring Allstate to stop sending non-emergency
telephone calls and short message service messages to Pacleb
in the future and dismissing this action as moot. If, and only
if, the District Court or any final appellate court declines to
issue such an order dismissing this action as moot, Allstate
will move the District Court to order the escrowed funds to be
returned to Allstate.”). Thus, even assuming this aspect of
common law tender would apply here, Pacleb has not actually
or constructively received the $20,000. Nor has he received
relief on his individual injunctive relief claim.7
In sum, Pacleb’s individual claims are not now moot,
because he has not actually received all of the relief to which
he is entitled on those claims.
7
Like Rule 68, common law tender exists principally as a means of
limiting damages or costs rather than mooting claims. See Tender, Black’s
Law Dictionary (10th ed. 2014) (defining “tender” as “an unconditional
offer of money or performance to satisfy a debt or obligation” and
“judicial tender” as “[a] tender with actual delivery of money to a party
while in court. The object is to avoid further expense. If the pursuer is
awarded no higher sum than that tendered, the pursuer is then found liable
for the defender’s expenses from the date of the tender.”); Alva R. Hunt,
A Treatise on the Law of Tender, and Bringing Money Into Court § 5
(1903) (“[W]here the debtor or obligor has but to pay the money or
perform the duty to discharge himself of the obligation, in order to stop the
running of interest, or prevent the accruing of damages, or to save a
forfeiture, or a penalty, an actual tender is necessary.” (footnote omitted)).
22 CHEN V. ALLSTATE INS. CO.
2. Allstate’s Suggestion That We Should Direct the
District Court to Enter Judgment on Pacleb’s
Individual Claims, as an Attempt to Moot the
Action, Is Contrary to Campbell-Ewald, Which
Affords a Would-be Class Representative with a
Live Claim a Fair Opportunity to Show
Certification Is Warranted
The question remains whether we should, as Allstate
urges, instruct the district court to order monetary and
injunctive relief on Pacleb’s individual claims, thereby
mooting them, before Pacleb has had an opportunity to move
for class certification. We assume, without deciding, a court
has authority in an appropriate case to enter judgment for
complete relief on a plaintiff’s individual claims over the
plaintiff’s objection. Cf. Diaz, 732 F.3d at 955 (recognizing
a court may have discretion to halt a lawsuit – or, as relevant
here, particular claims – by entering judgment for the plaintiff
when the defendant “unconditionally surrenders and only the
plaintiff’s obstinacy or madness prevents her from accepting
total victory” (quoting Genesis Healthcare, 133 S. Ct. at
1536) (Kagan, J., dissenting)) (internal quotation marks
omitted)).
Even if that is true, however, Campbell-Ewald clearly
suggests it would be inappropriate to enter judgment under
these circumstances. As Campbell-Ewald explained, “[w]hile
a class lacks independent status until certified, a would-be
class representative with a live claim of her own must be
accorded a fair opportunity to show that certification is
warranted.” Campbell-Ewald, 136 S. Ct. at 672 (emphasis
added) (citation omitted) (citing Sosna, 419 U.S. at 399).
Accordingly, when a defendant consents to judgment
affording complete relief on a named plaintiff’s individual
CHEN V. ALLSTATE INS. CO. 23
claims before certification, but fails to offer complete relief
on the plaintiff’s class claims, a court should not enter
judgment on the individual claims, over the plaintiff’s
objection, before the plaintiff has had a fair opportunity to
move for class certification.
This conclusion is consistent not only with Campbell-
Ewald but also with previous Supreme Court decisions noting
a named plaintiff’s “‘personal stake’ in obtaining class
certification,” Geraghty, 445 U.S. at 404, recognizing
“[s]ome claims are so inherently transitory that the trial court
will not have even enough time to rule on a motion for class
certification before the proposed representative’s individual
interest expires,” id. at 399, and disapproving of the “picking
off” of named plaintiffs to deny a would-be class
representative a fair opportunity to seek class relief, see
Roper, 445 U.S. at 339. As the Court said in Roper, 445 U.S.
at 339, “[r]equiring multiple plaintiffs to bring separate
actions, which effectively could be ‘picked off’ by a
defendant’s tender of judgment before an affirmative ruling
on class certification could be obtained, obviously would
frustrate the objectives of class actions.” But cf. Genesis
Healthcare, 133 S. Ct. at 1529–32 (applying these authorities
narrowly in the FLSA collective action context).
Contrary to Allstate’s argument, our conclusion is also
consistent with the proposition that “a court may have
‘discretion to halt a lawsuit by entering judgment for the
plaintiff when the defendant unconditionally surrenders and
only the plaintiff’s obstinacy or madness prevents her from
accepting total victory.’” Diaz, 732 F.3d at 955 (quoting
Genesis Healthcare, 133 S. Ct. at 1536 (Kagan, J.,
dissenting)). A named plaintiff exhibits neither obstinacy nor
madness by declining an offer of judgment on individual
24 CHEN V. ALLSTATE INS. CO.
claims in order to pursue relief on behalf of members of a
class. As the Supreme Court has recognized, the class action
device is often the only effective means of pursuing relief on
behalf of injured persons. “Where it is not economically
feasible to obtain relief within the traditional framework of a
multiplicity of small individual suits for damages, aggrieved
persons may be without any effective redress unless they may
employ the class-action device.” Roper, 445 U.S. at 339. A
named plaintiff acts sensibly by pursuing all of the relief
sought in the complaint, and “a judgment satisfying an
individual claim does not give a [named] plaintiff . . . ,
exercising her right to sue on behalf of other employees, ‘all
that [she] has . . . requested in the complaint (i.e., relief for
the class).’” Genesis Healthcare, 133 S. Ct. at 1536 (Kagan,
J., dissenting) (third and fourth alterations in original)
(quoting Roper, 445 U.S. at 341 (Rehnquist, J., concurring)).
Our approach is also consistent with leading treatises on
federal procedure. According to Wright & Miller, “[i]f the
defendant is willing to consent to judgment on terms that
embrace all the relief the plaintiff could win on the merits, the
action may be found moot.” 13B Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 3533.2
(3d ed. 2015). But “offers to provide full relief to the
representative plaintiffs who wish to pursue a class action
must be treated specially, lest defendants find an easy way to
defeat class relief.” Id.; accord 13C id. § 3533.9.1.
“[A]pplying both the flexibility of Article III’s requirements
and the need to protect the interests of class members prior to
certification, Article III mootness should not provide a
vehicle for ‘picking off’ named plaintiffs or eliminating class
treatment of claims until there has been a reasonable
opportunity to present the issue of class certification to the
court.” 5 Moore’s Federal Practice, supra, § 23.64[1][b].
CHEN V. ALLSTATE INS. CO. 25
“[W]hen a named plaintiff has requested class certification
and class relief in its complaint, but has not yet had a
reasonable opportunity to file a motion seeking class
certification, an offer of individual relief should not be
considered to be a tender of all relief requested in the
complaint.” Id.
Finally, our conclusion is consistent with district court
decisions issued since Campbell-Ewald was decided. See
Bais Yaakov of Spring Valley v. Graduation Source, LLC, ___
F. Supp. 3d. ____, No. 14-cv-3232 (NSR), 2016 WL 872914,
at *1 (S.D.N.Y. Mar. 7, 2016) (“Although Defendants sought
to avail themselves of the hypothetical proposed in Campbell-
Ewald by depositing the full amount of statutory damages
into the Court’s Finance Unit and assenting to the injunctive
relief requested by Plaintiff in its Complaint, . . . this Court is
bound by Campbell-Ewald to afford Plaintiff a fair
opportunity to show that class certification is warranted. . . .
[If] after discovery Plaintiff fails to certify a class,
Defendants may renew their request to issue judgment in
favor of Plaintiff based upon a complete offer of relief.”);
Brady v. Basic Research, LLC, 312 F.R.D. 304, 306
(E.D.N.Y. 2016) (precluding a defendant from using Federal
Rule of Civil Procedure 67 to moot a case before a plaintiff
has had a fair opportunity to pursue class certification).8 We
approve of these decisions, which adhere to the requirements
8
See Fed. R. Civ. P. 67(a) (“If any part of the relief sought is a money
judgment or the disposition of a sum of money or some other deliverable
thing, a party – on notice to every other party and by leave of court – may
deposit with the court all or part of the money or thing, whether or not that
party claims any of it. The depositing party must deliver to the clerk a
copy of the order permitting deposit.”). For a brief history of Rule 67, see
John Quincey Somerville, Fed. R. Civ. P. 67: Is It More Than Meets the
Eye?, 42 Ala. L. Rev. 215 (1990).
26 CHEN V. ALLSTATE INS. CO.
of Article III without depriving a named plaintiff of
Campbell-Ewald’s “fair opportunity to show that certification
is warranted.” 136 S. Ct. at 672.
In sum, a district court should decline to enter a judgment
affording complete relief on a named plaintiff’s individual
claims, over the plaintiff’s objection, before the plaintiff has
had a fair opportunity to move for class certification. See id.
In this way, even if Pitts were not controlling, a live
controversy would persist until the question of class
certification could be addressed.
CONCLUSION
We hold the judgment Allstate has consented to would
afford Pacleb complete relief on his individual claims for
damages and injunctive relief. To date, however, Pacleb has
not actually received complete relief on those claims. Those
claims, therefore, are not now moot. In addition, because “a
would-be class representative with a live claim of her own
must be accorded a fair opportunity to show that certification
is warranted,” id., we will not, as Allstate urges, direct the
district court to enter judgment on Pacleb’s individual claims
before Pacleb has had a fair opportunity to move for class
certification. Finally, even if Pacleb’s individual claims were
otherwise fully satisfied, he could continue to seek class
certification under Pitts. For these reasons, the district
court’s order denying Allstate’s motion to dismiss the
complaint for lack of subject matter jurisdiction is affirmed.
ORDER AFFIRMED.
***
CHEN V. ALLSTATE INS. CO. 27
Allstate’s motion to supplement the record on appeal,
filed February 12, 2016, is GRANTED.