Cell phone provider escapes class action suit for unsolicited text
messages
The lead plaintiff failed to file a motion for class certification
before the cell phone provider offered full relief through a settlement
letter. That rendered the case moot.
By Joe Forward, Legal Writer,
State Bar of Wisconsin
Nov. 21,
2011 – A cell phone service provider’s settlement offer to a
customer who filed a class action lawsuit was enough to render the case
moot, a federal appeals court has ruled.
Jerome Damasco filed a class action lawsuit against
Clearwire Corporation, alleging violations of
the Telephone Consumer Protection Act, 47 U.S.C. section 227, for
sending unsolicited text messages to an estimated 1,000 customers.
Clearwire offered Damasco a “full
relief” settlement before Damasco moved for
class certification, offering to pay Damasco and up to 10
other affected customers $1,500 for each unsolicited text message
received plus court costs, the maximum amount allowed under federal law.
Demasco never responded to the settlement
letter.
After Clearwire removed the case to federal court, it
filed a motion to dismiss, arguing the settlement offer rendered Damasco’s claim moot because it stripped
him of a personal stake in the outcome of the litigation.
In Damasco v. Clearwire
Corp., No. 10-3934 (Nov. 18, 2011), a three-judge panel for the
U.S. Court of Appeals for the Seventh Circuit
ruled that Clearwire’s settlement offer indeed
rendered Damasco’s class action moot.
The appeals panel, in an opinion by Jude Ilana Rovner, rejected Damasco’s
argument that Clearwire should not be allowed to buy off
named plaintiffs with involuntary settlement.
“To allow a case, not certified as a class action and with no
motion for class certification even pending, to continue in federal
court when the sole plaintiff no longer maintains a personal stake
defies the limits on federal jurisdiction expressed in Article
III,” Judge Rovner wrote.
Article III of the U.S. Constitution limits the jurisdiction of
federal courts to live cases and controversies, and requires parties to
maintain a personal stake in the outcome of a case.
The panel noted that plaintiffs can avoid this result by moving to
certify the class when they file their original complaint. “The
pendency of that motion protects a putative
class from attempts to buy off the named plaintiffs,” Judge Rovner explained.
