United States District Court, E.D. Virginia, Richmond Virginia.
DERRICK A. MILBOURNE, on his own behalf and on behalf of those similarly situated, Plaintiff,
JRK RESIDENTIAL AMERICA, LLC, Defendant.
ROBERT E. PAYNE, Senior District Judge.
This matter is before the Court on the DEFENDANT'S MOTION TO DISMISS FOR LACK OF SUBJECT-MATTER JURISDICTION (Docket No. 13) filed by JRK Residential America, LLC ("JRK"). For the reasons set forth herein, the motion will be denied.
Derrick A. Milbourne filed a class complaint alleging that JRK violated various sections of the Fair Credit Reporting Act ("FCRA"). Milbourne claims that, after hiring him on a conditional basis pending the receipt of a background check, JRK fired him after receiving that background check. Milbourne asserts that JRK violated the FORA because it did not comply with the statute's "procedural protections and requirements" in that JRK did not provide him a copy of the report that was used as a basis for rescinding the offer of employment; that JRK did not provide him with the notice it was required to give before requesting the report; and that JRK did not provide him with a description of his rights under the FCRA. Milbourne also alleges that JRK routinely violated the FCRA in this respect, and he has alleged facts that, if proved, would support a finding that JRK's employment practices have harmed a class of people who have applied for, and been denied employment by, JRK as a result of JRK's conduct.
On September 10, 2013 JRK made an Offer of Judgment to Milbourne under Fed.R.Civ.P. 68 (Docket No. 14-1). The offer of judgment was for $12, 000 "inclusive of all damages, " and "prejudgment interest, reasonable attorneys' fees, costs and expenses to which Plaintiff is entitled by law, as the Court may determine." Id . The offer included $2, 000 in statutory damages (calculated at $1, 000 for each of the two counts - the maximum statutory damages allowed under the FCRA), and $10, 000 in punitive damages (calculated at a ratio of 5:1 to the statutory damages tendered for each of the two counts). According to JRK, Milbourne ignored the offer and effectively rejected it by allowing it to expire.
On November 13, 2013, JRK made another offer of judgment, this time in the amount of $22, 000 "exclusive of any prejudgment interest, attorneys' fees, and costs, accrued to date to which the Court determines Plaintiff entitled in this action." (Docket No. 18-1 at 2). This offer also included $2, 000 in statutory damages ($1, 000 for each of the two counts) and $20, 000 in punitive damages (calculated at a ratio of 10:1 to the statutory damages). This offer also expired without action by Milbourne.
JRK contends that, because Milbourne rejected the offers of judgment, he no longer has an interest in the case and that, therefore, the case is moot.
The procedural history of this case is somewhat unusual, and a summary is warranted here.
On November 30, 2012, Milbourne filed his complaint and, on December 21, 2012, a summons was returned executed as to JRK. The summons was served on December 12, 2012, and JRK's answer to the complaint was due on January 2, 2013. But, no answer was filed. Furthermore, for eight months, neither Milbourne nor JRK made any filings in the case. Then, on August 1, 2013, Milbourne's counsel filed a Notice of Appearance and a Status Report. In the Status Report, Milbourne stated that he planned to move for entry of default no later than August 9, 2013; to move for class certification no later than August 30, 2013; and to move for default judgment upon the Court's certification of the class. Following the Status Report, the Court issued an Order on August 7, 2013 ("August 7 Order") directing Milbourne to file his request for entry of default by August 9, 2013. The August 7 Order also directed Milbourne to file his motion for class certification by August 30, 2013, and provided that the motion for class certification was granted, the proffered motion for default judgment should be filed within 30 days of entry of an Order certifying the action as a class.
On August 8, 2013, JRK filed a consent motion for leave to file a responsive pleading no later than August 28, 2013. On August 9, Milbourne filed a consent motion for extension of time to move for entry of default. On August 13, 2013, the Court granted the consent motion to allow JRK leave to file a response; denied as moot Milbourne's motion for extension of time to move for entry of default; vacated the August 7 Order; and directed JRK to file its Answer "and any other motion with respect to the Complaint" by August 28. JRK filed its Answer on August 28. JRK later filed this motion to dismiss for lack of jurisdiction. Milbourne responded on November 1, and JRK replied (after an extension of its filing deadline) on November 14. The motion is now ripe for decision.
The basis of the motion to dismiss for lack of subject matter jurisdiction rests squarely on JRK's contention that there is no case or controversy. That contention, in turn, is predicated on JRK's position that it made a complete offer of judgment under Fed.R.Civ.P. 68 which Milbourne rejected. Therefore, says JRK, the Court lacks jurisdiction to hear the case, the class allegations notwithstanding. The motion raises two issues: (1) whether the Rule 68 offer of judgment is a complete offer of relief; and (2) if so, whether that offer and its rejection moot Milbourne's interest in the case when no motion for class ...