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# United States Court of Appeals For the Seventh Circuit

No. 13-2699

E TTA S C OTT

, on behalf of herself an d other s si mi larly situated, Plaintiff-Appellant,

v.

W E S TL AKE S E R

V I C E S LLC, doin g busi

ness as W E S TL A KE F I NAN C I AL S E R

V I C E S , Defen dant-Appellee.
Appe al f ro m the Uni ted S tates Distri ct Co urt fo r the Nor thern Distri ct o f Il l i noi s, Eastern Di v i sio n. No. 12 C 9 28 9 — Rubén Cas til lo , Chief Judg e.

A RG U E D D E C E MB E R 10, 2013

— D E C I D E D J ANUAR Y 23, 2014

Before M AN I O N

, R OV N E R

, and H AMI L T ON

, Circ uit Judges.
H AMI L T O N , Cir cui t Judge. Etta Scot t fi led sui t on behalf of herself and a putativ e clas s allegin g that defendant W estlake Ser vic es LLC repe a t e d l y called her i n violati on of the Telephone Consum e r Pr ote cti on Act, 47 U.S.C. § 227 (“TCP A”). Before Scot t mov ed to certify a plainti ff clas s, W estlake offered2 No. 13-2699

to pay Scot t the full statuto ry damages fo r any calls that violated the TC P

A

. Scot t di d not accept the offer

. The di stric t court then held that the offer render ed Scot t’s case mo o t and enter ed final judgment, but ret ai ned jurisdi cti on ov e r p ostjudgment di scov ery i n the case. Scot t appeals, and w e rev erse. I. Factual and Procedural Background Scot t fi led her fi rst amended comp l a int (the oper ativ e complaint i n the case) on January 17, 201 3

. The complaint alleged that W

estlake repeat edly called her cell phone using an auto ma t e d di aler i n violati on of the TCP A. Scot t sought for herself and a putativ e clas s: (1) statuto ry damages of $500 for each negli gent v io l a t i on of the Act and $1500 for each i ntentional violati on of the Act, (2) injuncti v e relief, and (3) atto rney fees. She di d not im medi ately mo v e for class c ert i fi cati on. On Februar y 5, 2013, W e st l a ke sent Scot t’s atto rney an emai l wi th a set tlement offer

. W estlake offered to pay Scot t $1500 (the statuto ry maxi mum ) “for each and e very di aler

gener ated telephone call made to plainti ff.” The emai l w ent on to say that whi le Scot t had i denti fi ed tw enty di aler -generat ed calls made to her phone, W estlake beli ev ed there w ere only si x, and suggested further di scu ssi on to “resolv e the di screpanc y .” W estlake also agr eed to pay Scot t all costs tha t sh e w ould

recov er i f she prev ai led i n her laws ui t, and agr eed to the entry of a n inj unc tion prohibi tin g W estlake from calling her again wi thout her expr ess per mis sio n. The emai l conclu ded by

w arnin g Scot t t hat, i n W estlake’s view

, i ts offer render ed her

case moot

. The next day , Scot t mov ed for clas s certifi cati on and declined the settlement offer

. She explain ed that t here w as “a si gni fi cant contro v ersy” concerning how many di aler -gener-No. 13-2699 3
ated calls W

estlake had place d to her phone, so the offer w as i nadequate and di d not r ender her case moot

. W estlake then mov ed to di smi ss Scot t’s sui t as moot

. The di stric t court gr anted the motion, finding t ha t W estlake had offered Scot t ev ery thi ng she sought in her co mplaint thus depriving the co ur t of subject matter jurisdi cti on. The court recog ni zed, how ev er

, that t he re w as suffi ci ent unc ert ai nty about the actual ter ms of the settlemen t o ffer that i t w ould need to ret ai n jurisdi cti on to enforce compli ance wi th the offer

. The co ur t di rected the parties to conduc t di scov ery to deter

mine just how many dialer- gener ated calls Scot t had actually receiv ed from W

estlake so that the amount of W estlake’s chec k to Scot t could be calc ulated. I n the court’s view , Kokkonen v
. Guardian Life Ins. Co. of America , 511 U.S. 375 (1994), authorized thi s procedu r e a s long as the judgment i ncorpor ated the settlement offer

. Scot t appeals the di smi ssal and the di strict court’s r etention of jurisdi cti on under Kokkonen
. II. Analysis Before turnin g to the sub st a nc e of Scot t’s clai ms, w e mus t fi rst deter mine the basi s of our jurisdi cti on ov er thi s a ppeal. P ost-judgment di scov ery i s ongo ing i n the di stric t co ur t, and that court may i ssu e further ruli ngs to deci de di scov ery di sputes and enforce the settlement o ff e r
. Despi te these cont inu e d proceedings, the di stric t court enter ed on June 6, 2013 a final judgment that resolv ed all cl ai ms. Upon entry of that final judgment, Scot t could not ris k w ai tin g fo r fu r t her acti on. W

e conclu de that w e hav e jurisdi cti on ov er the appeal from the final judgment pursuant to 28 U.S.C. § 1291. On to the merits.4 No. 13-2699
Un d e r thi s ci rcui t’s case law , an unac cepted settlement offe r
can render the plainti ff’s case moot i f i t giv es the plaint iff

ev ery thi ng s he requested. Damasco v. Clearwire Corp. , 662 F .3d 8 9 1 , 8 95 (7th Ci r
. 2011); Gat es v
. City of Chicago , 623 F .3d 38 9 , 413 (2010). These cases reason that once “the defendant offers to sati sfy the plainti ff’s entire demand, there i s no di spute ov er whi ch to li tigate” and t hus no contro v ersy to r e so l ve. Rand v
. Monsanto Co. , 926 F .3d 596, 597–98 (7th Ci r
. 1991 ). In other

w o r ds, “Y

ou cannot persi st i n suing after y ou’v e w o n. ” Greisz v
. Household Bank (Ill.), N.A. , 176 F .3d 1012, 1015 (7th Ci r
. 1999). 1
On the other hand, i f the defendant offers to pay only what i t thinks mi ght be due, the offer does not render the plainti ff’s

case moot

. Gat es v
. T

owery, 430 F .3d 429, 431–32 (7th Ci r
. 2005). In that si tuation, the plainti ff st ill has a stake i n the acti on becau se she may o btai n addi tional relief i f she prev ai ls. The plainti ff’s stake i s negated only i f no addi tional relief i s

Si nce most pl aintif fs are happy to hav e def endants surrender , this tactic 1 i s most contro v ersi al as a mean s to short-c i rcui t a l oo ming cl ass actio n or as
a mean s to av oi d pa ying a ttorney fees an d costs in l i ght of Buckh annon Bd. and Care Hom e, Inc. v. Wes t Virginia Dept

. of Health and Huma n Res ources , 53 2 U.S

. 59 8 (2 00 1)

. The ci rcui ts are spli t on whether an una ccepte d settle ment of fer can render a case moo t. Co mpare, e.g. , Diaz v. First A m. Hom e Buyers Protectio n Corp. , 73 2 F.3d 94 8, 95 0 (9 th Ci r. 20 13 ) (no) , with Warre n v. Sess oms & Rogers, P.A. , 67 6 F.3d 36 5, 37 0 (4 th Ci r. 20 12 ) (yes). The Supre me Co urt granted certi or ari i n Genes is Health care Corp. v. Symc zyk, 13 3 S. Ct. 15 23 (2 01 3) , to reso l v e this spli t b ut ulti mat el y deci ded tha t case on na r r ower grounds. The ci rcui t spli t remains, b ut t here are reasons to questio n our ap pro ach to the pro b l em. See id. at 15 33 –3 4 (Kagan, J., di ssenting )

. S c o t t do es not chall enge our ci rcui t’s v i ew, so we wil l conti nu e t o awa i t a
reso l utio n ofthe spl i t.No. 13-2699 5 possi ble. Id

. T o hold other wi se w ould i mply that any reasonable settlement offer moot s the plainti ff’s case or that long-shot clai ms are moot rat her than unli kely to suc ceed. Id. at 432. “That’s not the w ay thi ngs w or k: A bad theor y (wh ether of li abi li ty or of d amages) does not undermine federal jurisdi ction.” Id.
W estlake di d no t o ffer to sati sfy Scot t’s entire demand. W estlake offered to pay only for di aler -g e ne r a ted calls and acknowledged only si x such calls, si gni fi cantly fewer than the tw enty or more calls Scot t i denti fi ed i n her complaint, tr anslati ng to a d iff e r e nc e of at least $21,000 i n damages due. That i s not an unc ondi tion a l offer to pay the plainti ff the entirety of he r demand. Whether a call i s “di aler -generat ed” wi thi n the meaning of the TCP

A i s a hotly conteste d i ssu e on the mer i ts. See, e.g. , Satterfiel d v
. S i m on & Schu ster, Inc., 569 F .3d 946, 950 (9th Ci r
. 2009) (rev ersi ng gr ant of sum mary judgment becau se of factual di spute on whether defendants had used automated di aler i n violati on of TCP A). W estlake’s offer amo unted to tellin g Scot t i t w as wi lling to pay for all calls that i n i ts esti mation (or perhaps that of a court) violated the TCP A. Under the sound reason ing o f Gates v
. T owery, such an offer could not render Scot t’s case moot. W estlake argues, how ev er , that Damasco v
. Clearwire Corp. , 662 F .3d 891 (7th Ci r . 2011), requi res affi rmance. W e di sagree. In Damasco , the defendant o ff e r e d to pay the plainti ff maxi

mum statuto ry damages “for each tex t mess age receiv ed from Clearwi re.” Id. at 893. That offer gave the plainti ff ev ery thing he requested becau se i t offered to pay the pla i nti ff for ev ery
mess age he had receiv ed from the defendant. All that remained to be done w as to count the numb er of calls and wri te6 No. 13-2699
the plainti ff a chec k. Here, by contrast, W estlake offered to pay for each dial e r -g e nerated call Scot t receiv ed, and di sputed the numb er of quali fyi ng calls

. The fact that W estlake w as wi lling to pay for “each and ev ery ” such mess age does not change the fact that W

estlake w as of fe r ing to pay only the amount i t felt mi ght be due. That w as not enough to mootScot t’s case. Our conc lusi on i s bolstered by the dis tr i ct court’s or der t o conduc t post-judgment di scov ery to deter mine how many quali fyi ng calls Scot t receiv ed. P ost-judgment di scov ery i s
unus ual to begi n wi th

. The i dea of post-judgment di scov ery i nto a di sputed i ssu e on the merits of the case to fi gure out how to apply an unac cepted settlement offer that supp o sedly

re nd e r ed the case moot i s di ffi cult to gr asp. Where further di scov ery relev ant to the merits and possi bly ev en futu re ruli ngs are needed to deter mine how much t he d efendant actually offered to pay

, a li v e contro ver sy st i ll exis ts betw een the part i es. The di stric t court conclu ded, and W estlake arg ues, that Kokkonen v
. Guardian Life Ins. Co. of America , 511 U.S. 375 (1994) , authorized the court to ret ai n jurisdi cti on ov er the postjudgment di scov ery proceedings. Becaus e w e conclu de tha t Scot t’s case i s not moot, w e need not deci de whether Kokkonen authorized thi s p ro cedure. W e note, how ev er

, that Kokkonen i nv olv ed a settleme nt a gr eement rat her than an unac cepted settlement offer

, and that the parties’ post-judgm e nt d i spute di d not inv olv e the merits of the underly ing case. Kokkonen , 511 U.S. at 376–77. Superv i sing post-judgment di scov ery i nto the merits of the underlyin g case i s qui te d iff e rent from deter mining, as i n Kokkonen , whether one party mus t ret urn a fi le to the other

. Id. at 377. The di fference betw een the di sagree-No. 13-2699 7

ment i n Kokkonen and the di sagreement i n thi s case i s a further i ndi cati on that S cott’ s cas e i s not moot

. One somewhat stic ky puzzle r emains to be r esolv ed: how should the di stric t cour t proceed on remand, giv en that di scov ery i s already taking place as part of the post-judgment proceedings? W

e conclu d e th a t the di stric t court should si mply

rev i v e the or i gin al case and conv ert the post-jud g ment di scov ery i nto di scov ery on the merits of the underlyin g case, i nclu ding full di scov ery i f appropr i ate. Scot t i s also fr e e to
renew her motion for cl ass certifi cati on, whi ch w as deni ed when h er case w as decl ared moo t. W e REVERSE the judgment di smi ssing the case as moot and REMAND to the di stric t c ourt for proceedi ngs consi stent wi th this opin i on.