Court Lets Plaintiff Revive Mooted Claims In Second Action Against Same Defendants

The Eastern District of New York recently denied a motion to dismiss and found that the plaintiff's claims were not precluded by a different court's ruling that the same claims against the same defendants had been mooted by an offer of judgment. See Bank v. Spark Energy Holdings, No. 13-6130, 2014 U.S. Dist. LEXIS 84493 (E.D.N.Y. June 20, 2014); Bank v. Spark Energy Holdings, No. 11-4082, 2013 U.S. Dist. LEXIS 150733 (S.D. Tex. Oct. 18, 2013).

The plaintiff alleges that he received telemarketing calls "using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party." 47 U.S.C. § 227(b)(1)(B). He first filed suit in the Southern District of Texas, where the defendants eventually made a Rule 68 offer of judgment. Although the plaintiff rejected that offer, the Texas court found that he no longer had a personal stake in the outcome of the litigation because he had been offered complete relief and had yet to move for class certification. As such, the Texas court found that it lacked subject matter jurisdiction and dismissed his claims. See Bank, 2013 U.S. Dist. LEXIS 150733, at *37-39.

The plaintiff promptly filed suit in the Eastern District of New York and asserted the same claims against the same defendants. As their offer of judgment had already been rejected, the defendants did not make another. Instead, they moved to dismiss based on the preclusive effect of the prior dismissal.

The New York court denied the motion to dismiss. It explained that claim preclusion only applies if there was a final judgment on the merits in the prior action, and that a dismissal for lack of subject matter jurisdiction is generally not considered a final judgment on the merits. The fact that the Texas court purported to dismiss the claims "with prejudice" did not alter its analysis. Bank, 2014 U.S. Dist. LEXIS 84493, at *10.

The court then explained that issue preclusion only applies if an identical issue was adjudicated in the prior action. It concluded that it was being asked to decide a different issue because it was being confronted with a different set of facts:

I find that the identical jurisdictional issue is not presented here because the prior court's determination of mootness relied on particular factual circumstances that are not the same as the facts presented in this suit. In the Texas case, the court decided that plaintiff's individual TCPA claim was moot because plaintiff had rejected a Rule 68...