Court Opinion

ID: 4159083
Source: CourtListenerOpinion
Date Created: 2017-04-10 15:00:22.190832+00
Date Added: 2024-06-11T14:07:04.617548
License: Public Domain

15-601-cv
Lary v. Rexall Sundown, Inc., et al.

                                       UNITED STATES COURT OF APPEALS
                                          FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 10th day of April, two thousand seventeen.

PRESENT:             JOSÉ A. CABRANES,
                     ROSEMARY S. POOLER,
                     GERARD E. LYNCH,
                                  Circuit Judges.

JOHN H. LARY, JR., individually and as a representative
of a class of similarly situated persons,

                                Plaintiff-Appellant,                   15-601-cv

                                v.

REXALL SUNDOWN, INC., NBTY, INC., REXALL
SUNDOWN, LLC, REXALL US DELAWARE, INC., JOHN
DOES 1–10, REXALL INC., REXALL SUNDOWN 3001,
LLC, CORPORATE MAILINGS, INC. D/B/A CCG
MARKETING SOLUTIONS, and UNITED STATES
NUTRITION, INC.,

                                Defendants-Appellees.*

     *
         The Clerk of Court is directed to amend the caption as shown above.

                                                         1
FOR PLAINTIFF-APPELLANT:                                      GLENN L. HARRA, Anderson + Wanca,
                                                              Rolling Meadows, IL; Aytan Y. Bellin,
                                                              Bellin & Associates LLC, White Plains,
                                                              NY.

FOR DEFENDANTS-APPELLEES REXALL                               CASEY D. LAFFEY (Eric F. Gladbach, on
SUNDOWN, INC., REXALL SUNDOWN 3001,                           the brief), Reed Smith LLP, New York,
LLC, REXALL INC., UNITED STATES                               NY.
NUTRITION, INC., AND NBTY, INC.:

FOR DEFENDANT-APPELLEE CORPORATE                              MATTHEW J. FEDOR, Drinker Biddle &
MAILINGS INC., D/B/A CCG MARKETING                            Reath LLP, Florham Park, NJ.
SOLUTIONS:

       Appeal from a judgment of the United States District Court for the Eastern District of New
York (Sandra J. Feuerstein, Judge).

     UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court be and hereby is
VACATED and REMANDED.

         Plaintiff-appellant John H. Lary, Jr., (“Lary”) appeals from the District Court’s February 18,
2015 entry of judgment in his favor on his individual claims, denial of his motion for class
certification, and dismissal of his putative class action for lack of subject-matter jurisdiction. See Lary
v. Rexall Sundown, Inc., 74 F. Supp. 3d 540 (E.D.N.Y. 2015). Defendant CCG Marketing Solutions
(“CCG”) is a marketing company that entered into a Master Service and Support Agreement with
defendant United States Nutrition, Inc., a corporate affiliate of the various Rexall defendants listed
in the caption of this appeal (collectively, the “Rexall Defendants”). Lary brings this action against
the Rexall Defendants, CCG, and various John Does (collectively, the “Defendants”), alleging
violations under the Telephone Consumer Protection Act of 1991 (“TCPA”), 47 U.S.C. § 227.

         We assume the parties’ familiarity with the underlying facts, procedural history of the case,
and issues on appeal, and we recite here only those facts most relevant to the resolution of this
appeal. On June 26, 2014, CCG served Lary with an offer of judgment pursuant to Rule 68 of the
Federal Rules of Civil Procedure. On July 9, 2014, Lary moved for class certification to prevent
CCG from mooting his class-action claims. On July 21, 2014, CCG moved to dismiss Lary’s
complaint on the ground that all of Lary’s claims had been mooted by its offer of judgment, and that
the District Court therefore lacked subject-matter jurisdiction. The District Court granted CCG’s
motion on February 10, 2015, holding that “CCG’s pre-certification offer, which provides all the
relief plaintiff could recover, moots plaintiff’s claim” as to all Defendants. Lary, 74 F. Supp. 3d at
557. The District Court also denied Lary’s motion for class certification, reasoning that “in the
absence of a claim against defendant, plaintiff cannot adequately represent the purported class.” Id.
(citation omitted).

                                                     2
         We review de novo a district court’s dismissal of a complaint under Rule 12(b)(1) of the
Federal Rules of Civil Procedure for lack of subject-matter jurisdiction. See Atterbury v. U.S. Marshals
Serv., 805 F.3d 398, 403 (2d Cir. 2015). “We review a district court’s denial of class certification for
abuse of discretion.”1 Sergeants Benevolent Ass’n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, 806
F.3d 71, 86 (2d Cir. 2015). To the extent that the District Court’s decision “was based on
conclusions of law, we review such conclusions de novo, and to the extent that its decision was based
on findings of fact, we review such findings for clear error.” Id.

         While this appeal was pending before us, two decisions affecting the issues presented in this
appeal have been filed.2 First, the Supreme Court decided Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663
(2016), which directly addressed the question of whether a case becomes moot, and thus beyond the
judicial power of Article III, when a plaintiff receives an offer of complete relief on his claim. In
Campbell-Ewald, the plaintiff sought individual and class-wide relief under the TCPA, alleging that he
and members of the putative class received unsolicited text messages sent by the defendant. Id. at
667. The Campbell-Ewald plaintiff rejected the defendant’s Rule 68 offer of judgment. Id. at 668. The
Supreme Court held that despite the Rule 68 offer, a case or controversy remained. “An unaccepted
settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect.” Id.
at 670 (quoting Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1533 (2013) (Kagan, J.,
dissenting)). “[W]ith no settlement offer still operative, the parties remained adverse; both retained
the same stake in the litigation they had at the outset.” Id. at 670–71.

         A subsequent panel of our Court recently applied Campbell-Ewald in Radha Geismann, M.D.,
P.C. v. ZocDoc, Inc., 850 F.3d 507 (2d Cir. 2017) (“Geismann”). As in Campbell-Ewald, the Geissman
defendant, ZocDoc, Inc., made a Rule 68 offer of judgment to the plaintiff in a putative TCPA class
action, and the district court granted ZocDoc’s motion to dismiss on mootness grounds. Unlike
Campbell-Ewald, the district court in Geismann entered a judgment in the plaintiff’s favor. Id. at 513.
The Geismann panel nonetheless held that “the basis upon which the district court entered judgment
did not exist: An unaccepted Rule 68 offer of judgment does not render an action moot.” Id. The
panel further reasoned that the district court’s entry of judgment in Geismann was not a “meaningful”
distinction from Campbell-Ewald “because the judgment should not have been entered in the first
place.” Id.

    1
     A district court has abused its discretion if it based its ruling on an erroneous view of the law or
on a clearly erroneous assessment of the evidence, or rendered a decision that cannot be located
within the range of permissible decisions.” In re Sims, 534 F.3d 117, 132 (2d Cir. 2008) (internal
quotation marks, alteration, and citations omitted); see also In re City of New York, 607 F.3d 923, 943
n.21 (2d Cir. 2010) (explaining that “abuse of discretion” is a nonpejorative “term of art”).
    2
        The parties have submitted supplemental briefing in response to both cases.

                                                    3
        The facts of the case before us are largely indistinguishable from Geismann. The District
Court’s order dismissing Lary’s putative TCPA class action was premised on CCG’s Rule 68 offer
mooting his claim. Pursuant to the holdings of Campbell-Ewald and Geismann, the District Court’s
dismissal was based on an error of law since Lary’s claim was not mooted by CCG’s offer of
judgment. Accordingly, judgment should not have been entered in his favor.

         The Defendants argue that this case matches the hypothetical posed by Campbell-Ewald,
where the Supreme Court declined to consider whether the outcome would be different had the
“defendant deposit[ed] the full amount of the plaintiff’s individual claim in an account payable to the
plaintiff, and the court then enter[ed] judgment for the plaintiff in that amount.” 136 S. Ct. at 672
(emphasis added). Here, “the district court entered a judgment that should not have been entered in
the first place, and [CCG] then,” after Campbell-Ewell was issued, sent Lary a certified check “in
satisfaction of that errant judgment.” Geissmann, 850 F.3d at 514–15. Lary did not accept the check,
nor did CCG seek leave to deposit the amount of its offer with the District Court. The hypothetical
posed by Campbell-Ewald is thus not present here. As such, we need not, and do not, decide whether
a different outcome would result if the facts here matched this hypothetical.

                                          CONCLUSION

        We have reviewed all of the arguments raised by the Defendants on appeal and find them to
be without merit. For the foregoing reasons, we VACATE the February 18, 2015 judgment of the
District Court and REMAND for further proceedings consistent with this order.

                                                       FOR THE COURT:
                                                       Catherine O’Hagan Wolfe, Clerk

                                                  4