Seventh Circuit Rejects Rule 67 Mootness Argument But Keeps Campbell-Ewald Full Deposit Maneuver Alive
Rien n’est eternel. Nothing lasts forever. In TCPAland, things don’t even last a week.
Just days after a Chicago district court endorsed the tactic in A Custom Heating & Air Conditioning, Inc. v. Kabbage, Inc., 2017 U.S. Dist. LEXIS 93134 (N.D. Ill. June 16, 2017), the Seventh Circuit dealt the Rule 67 mootness maneuver—i.e. “pick off” play—a hearty blow.
But all is not lost for those still hoping to end TCPA class actions.
In Fulton Dental v. Bisco, Inc., 2017 U.S. App. LEXIS 10839 (7th Cir. June 20, 2017), the Seventh Circuit reversed a standard-bearing case approving of the Rule 67 mootness procedure, Fulton Dental, LLC v. Bisco, Inc., 2016 U.S. Dist. LEXIS 118658 (N.D. Ill. Sept. 2, 2016), which dismissed a TCPA class action because it determined that the defendant’s Rule 67 deposit and acquiescence to an adverse injunctive order mooted the class representative’s claim. The Seventh Circuit reversed the decision because it considered the dismissal “premature” before class certification and disagreed with the premise that the procedure invokes a mootness question at all.
But, luckily, the Seventh Circuit did not stop there. The Court endorsed a new procedure for defendants that will have a similar impact as the waning Rule 67 maneuver. The new strategy is to couple a full deposit with an affirmative defense such as accord and satisfaction, payment, estoppel or waiver, and to make such a deposit directly into a class representative’s “individual account” where the representative has the ability to access and exercise control over the deposited funds (as opposed to the court’s registry pursuant to Rule 67, where there is no such control). This new procedure, according to the Seventh Circuit, comports more closely with Campbell-Ewald and should cause district courts to “question whether [the class representative] is the appropriate champion for the class.”
One final point: the Seventh Circuit noted that full compensation may need to include the value the class representative derives in serving as a class representative, not just the maximum statutory damages plus costs and fees. The Court unfortunately gave no guidance on how to value this benefit to the class representative.
TCPA law is ever-changing.