In Chen v. Allstate Ins. Co., 2013 WL 2558012 (N.D.Cal. 2013), Judge Hamilton found a Rule 68 offer insufficient to moot a TCPA plaintiff’s federal law suit, and found an ‘unintended recipient’ of calls to her cellular telephone pleaded sufficient facts to state a claim under the TCPA.  The facts were as follows:

Plaintiff Richard Chen (“Chen”) filed the original complaint on February 14, 2013, as a proposed class action seeking statutory damages ($500 per unlawful call, or up to $1,500 per unlawful call for knowing/willful violations) and injunctive relief against Allstate. Chen alleged that in January 2013, Allstate called him on his cell phone in an attempt to solicit his purchase of an insurance policy. He asserted that Allstate placed “no less than eight (8) calls” to his cell phone through the use of an “automatic telephone dialing system;” that he had never been a customer of Allstate; and that he had never given Allstate his prior consent to call his cell phone using an automatic telephone dialing system.  On March 3, 2013, Chen filed a first amended complaint (“FAC”), adding an additional plain-tiff—Florencio Pacleb (“Pacleb”). The FAC alleges that Allstate called Pacleb “no less than five (5)” times on his cell phone in February and March 2013, using an automatic telephone dialing system; that he had never been a customer of Allstate, and had not given Allstate prior consent to make the calls; and that the calls were not for emergency purposes. The FAC also alleges that Pacleb was never able to talk to a “live human representative” from Allstate, and that each time he answered the call he was greeted with “dead air” followed by a recorded message asking for an individual named “Frank Arnold.”  ¶  On April 10, 2013, Allstate made an offer of judgment to Chen and Pacleb pursuant to Federal Rule of Civil Procedure 68. Allstate offered Chen $15,000, and Pacleb $10,000, plus “reasonable attorney’s fees and costs that have been accrued to date.” Allstate also offered to stop sending plaintiffs non-emergency telephone calls and short message service messages, and to have a reasonable amount of attorney’s fees and costs determined by the court if the parties could not agree on the amount. ¶  On April 24, 2013, counsel for Allstate sent plaintiffs’ counsel a letter stating, “Allstate hereby extends its April 10, 2013 offer of judgment until such time as it is accepted by plaintiffs or Allstate withdraws the offer in writing.” On April 25, 2013, Allstate filed the present motion to dismiss.  ¶  On May 8, 2013, Chen filed a notice of acceptance of Allstate’s offer of judgment, and was effectively dismissed from the case (though no request for judgment has yet been filed by Allstate). To date, Pacleb has not accepted Allstate’s offer. Allstate asserts that the offer to Pacleb is still “open.”

Judge Hamilton found that the Rule 68 offer did not moot the Plaintiff’s claims, finding that Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1086–87 (9th Cir.2011) was not overruled by the Supreme Court’s recent decision in Genesis Healthcare Corp. v. Symczyk, –––U.S. ––––, 133 S.Ct. 1523, ––– L.Ed.2d –––– (2013).

Here, Allstate argues that Pitts is no longer good law in light of the Supreme Court’s recent decision in Genesis Healthcare Corp. v. Symczyk, –––U.S. ––––, 133 S.Ct. 1523, ––– L.Ed.2d –––– (2013), but the court does not agree. ¶ . . . .Genesis, which was an FLSA collective action, is easily distinguishable from Pitts. While Pitts initially alleged both an FLSA collective action and a state law class action, the plaintiff subsequently determined not to pursue the FLSA claims. Pitts, 653 F.3d at 1093–94. Thus, the ruling in Genesis, which was limited to the collective action context, is not directly applicable to the class action context (and thus, does not—as Allstate attempts to argue here—“overrule Pitts sub silentio” ). The present case was filed as a proposed Rule 23 class action—which also means that the discussion in Genesis is of only limited applicability, and Pitts remains controlling.¶  As indicated above, the court finds that Genesis does not control this case. The Supreme Court in Genesis specifically did not decide that an unaccepted Rule 68 offer in an FLSA collective action will moot the named plaintiff’s claims, but rather simply assumed it would based on what had transpired in the lower courts. The Court’s ruling was that once it had been determined that the named plaintiff’s claims were moot, the case could not be kept on for a conditional certification. ¶  It is true that the Court did reject the reasoning that the Ninth Circuit in Pitts used (based on Sosna, Geraghty, and Roper ) in the class action context, but it also emphasized that class actions are different than collective actions. So while the Supreme Court might at some future date actually overrule Pitts and decisions from other Circuits holding that the rule articulated in Genesis also applies in class actions, as of now that has not happened, and Pitts remains good law as far as the court can ascertain.

The District Court easily disposed of the Defendant’s argument that the Plaintiff lacked standing to sue as an ‘intended recipient’ under the TCPA.

Allstate contends that the phrase “called party” has been interpreted as meaning “the party to whom the call is directed,” or “the intended recipient of the call,” and that here, the allegations in FAC show that Pacleb was not the intended recipient of the calls and was not the “called party.”. . . Allstate asserts that Pacleb does not dispute that the phone calls he claims to have received were placed to a man named Frank Arnold. . .Allstate notes that whether the issue involves a residential phone or a cell phone, the TCPA expressly refers to calls made to the “called party” in both contexts. Allstate argues that courts interpreting this language have concluded that in order to have stand-ing, the plaintiff must have been the intended recipient of the call—the reasoning being that the TCPA provides an exception for calls made with the prior express consent of the “called party,” and there is no way that an unintended recipient could provide express consent. ¶  Thus, Allstate argues, the only logical interpretation of § 227(b)(1)(A) ( (iii) is one that requires the party asserting the TCPA claim to be the party to whom the calls were directed. Here, since the FAC alleges that the calls were intended for “Frank Arnold,” Pacleb cannot claim to have been the intended recipient of the calls and therefore lacks standing to maintain an action under the TCPA. ¶  The court finds that the question whether the calls were intended for Frank Arnold, or for plaintiff as the account-holder of the cell phone appears to involve a factual dispute, and is thus not appropriate for decision here.