Expensify, Inc. v. Eddie White ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 11 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
EXPENSIFY, INC., No. 19-17320
Plaintiff-Appellant, D.C. No. 4:19-cv-01892-PJH
v.
MEMORANDUM*
EDDIE WHITE,
Defendant-Appellee,
and
MATT KOLESAR,
Defendant.
Appeal from the United States District Court
For the Northern District of California
Phyllis J. Hamilton, District Judge, Presiding
Submitted December 8, 2020**
San Francisco, California
Before: BOGGS,*** M. SMITH, and BENNETT, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Expensify, Inc. appeals a district-court ruling granting a motion to dismiss its
suit for declaratory judgment against Eddie White and Matt Kolesar (“the
Defendants”). Expensify, an internet-only company, sued the Defendants in
response to communications from the Defendants’ counsel alleging that Expensify’s
website and mobile applications discriminated against blind users. The Defendants
had stated that a lack of accessibility violated three civil-rights statutes, including
the Americans with Disabilities Act, 42 U.S.C. §§ 12181–12189 (“ADA”).
Expensify sought a declaration that it did not violate the statutes.
In response to the complaint, the Defendants each executed a “Release and
Waiver of Claims” that included irrevocable and unconditional covenants not to sue
Expensify regarding the accessibility of its products. The Defendants then moved
to dismiss the action for lack of subject-matter jurisdiction under Federal Rule of
Civil Procedure 12(b)(1). The district court ruled that it had jurisdiction at the outset
of the case but, finding that the waivers mooted the action, granted the motion.1
Expensify, Inc. v. White, No. 19-CV-01892-PJH, 2019 WL 5295064, at *3–8 (N.D.
Cal. Oct. 18, 2019).
***
The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
1
Before the ruling, the parties entered a stipulation voluntarily dismissing Kolesar.
2
On appeal, Expensify argues that the district court erred by holding that it had
no right to nominal damages, and therefore its case was moot. Because there was
no error, we AFFIRM the district court’s dismissal.
The district court properly found—and the parties do not dispute on appeal—
that subject-matter jurisdiction existed when Expensify filed the complaint. We
review de novo the motion to dismiss for lack of subject-matter jurisdiction. See US
West, Inc. v. Nelson, 146 F.3d 718, 721 (9th Cir. 1998).
1. A jurisdiction-providing controversy must exist at all stages of review, not
merely when a party files its complaint. See Already, LLC v. Nike, Inc., 568 U.S.
85, 90–91 (2013). “A case becomes moot,” and a controversy ceases to exist, when
“the parties lack a legally cognizable interest in the outcome.” Id. at 91 (quoting
Murphy v. Hunt, 455 U.S. 478, 481 (1982) (per curiam)). There is an exception if
the wrongful behavior can reasonably be expected to recur, but an unconditional and
irrevocable covenant not to sue can preclude that possibility. See id. at 92–93.
2. A case is not moot if effective relief remains available, such as nominal
damages. Bayer v. Neiman Marcus Grp., Inc., 861 F.3d 853, 862, 868 (9th Cir.
2017). “A live claim for nominal damages will prevent dismissal for mootness.”
Ibid. (quoting Bernhardt v. Cnty. of Los Angeles, 279 F.3d 862, 872 (9th Cir. 2002)).
3. The waivers signed by the Defendants mooted the action. The waivers
were nearly identical to those evaluated in Already, LLC v. Nike, Inc., 568 U.S. 85,
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93 (2013), which were found to moot the case and preclude the possibility of future
suits. Because the Defendants waived their right to bring a claim against Expensify
in the future, there was no longer a live controversy and the court ceased to have
subject-matter jurisdiction. See id. at 93–96, 101–02.
4. Expensify’s argument that its claim for nominal damages kept its complaint
alive is misplaced. Nominal damages were not proper because Expensify does not
seek to vindicate dignitary interests nor important rights. See Bayer, 861 F.3d at
874. Private accusations that Expensify may have violated another person’s civil
rights is not an affront to Expensify’s dignitary interests. While nominal damages
may be available for some ADA claims seeking to redress dignitary harms,
Expensify is not a plaintiff bringing a suit under the ADA, but a potential ADA
defendant seeking declaratory relief.
Accordingly, we agree with the district court that there are no special interests
or legal authorities supporting Expensify’s claim for nominal damages. Expensify’s
complaint against White is moot and therefore it was properly dismissed.
AFFIRMED.
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